Jeffrey Sommers

The Swedish Model and the Future of Labour Standards after Laval

This article reflects on the European Court of Justice ruling in the case of Laval, involving Latvian posted workers in Sweden. It analyses the implications of the ruling and ensuing debate over the Laval case for the future of the ‘Swedish model’ and labour standards. It suggests that profound dilemmas now face trade unions both at Swedish national and European level as to appropriate strategies to adopt to defend national pay and working conditions in the light of the European Court decision and especially in the Swedish context due to the subsequent ruling by the Swedish Labour Court. Nevertheless, a human rights discourse is emerging in which the European Court of Human Rights may act as a counterbalance to the European Court of Justice, especially in the context of the Lisbon Treaty.

The contradictions of austerity : the socio-economic costs of the neoliberal Baltic model

The great financial crisis of 2008 and the ensuing global economic and financial turmoil have launched a search for ‘models’ for recovery. The advocates of austerity present the Baltic states as countries that, through discipline and sacrifice, showed the way out of crisis. They have proposed the ‘Baltic model’ of radical public sector cuts, wage reductions, labor market reforms and reductions in living standards for other troubled eurozone countries to emulate. Yet, the reality of the Baltic ‘austerity fix’ has been neither fully accepted by its peoples, nor is it fully a success. This book explains why and what are the real social and economic costs of the Baltic austerity model.We examine each of the Baltic states by connecting national-level studies within a European and global political economy, thereby delivering comparative breadth that supersedes localized understandings of the crisis. Thus, for each of the three Baltic states, individual chapters explore the different economic and social dimensions of neoliberal post-communism, and the subsequent wider global economic and financial crisis in which these new open-market economies have found themselves especially vulnerable. The ‘austerity model’ adopted by Baltic national governments in response to the crisis reveals the profound vulnerabilities created by their unwavering commitment to free market solutions, not least in terms of the significant ‘exit’ of their labor forces.Today ‘recovery’ appears to be on the horizon. We look beyond basic financial metrics claiming a success story for the Baltic austerity model to reveal the damaging economic and social consequences, first of neoliberal policies adopted during transition, and latterly of austerity measures based on ‘internal devaluation.’ Combined, these policies undermine the possibility of longer-term recovery, and even social and economic sustainability, not to mention successful integration in the now-faltering wider European project.

Trajectories of Entropy and “the Labour Question”: The Political Economy of Post-communist Migration in the New Europe

This article begins by outlining the global historical context of contingent neoliberalism which has emerged in the late twentieth century as the dominant alternative economic trajectory to that of corporatist liberal welfare capitalism. Our analysis connects contemporary dimensions of labour migration and the challenges of economic development. It is relevant to the understanding of contemporary developments in Central and Eastern Europe in that we locate a case study of labour migration from the Baltic State of Latvia as an outcome of the application of the trajectory of neoliberalism that more widely now threatens to dismantle Jacques Delors’ “Social Europe” model. We argue that in the new post-communist EU member states such as Latvia, such socioeconomic prescriptions based on a “low road” of poor labour standards fail to deliver sustainable development for those who have adopted this path.

Austerity and the Demise of Social Europe: The Baltic Model versus the European Social Model

Abstract This article draws on the experience of the imposition of radical austerity measures in the Baltic states. It challenges the myth that austerity can be achieved in a socially and economically ‘costless’ manner. Baltic-style austerity has now become a template of ‘successful adjustment’ and a recipe for recovery of the Eurozone. The authors argue contra such ‘myth-making’ that austerity is compromising the longer run sustainability of societies that follow this path, while simultaneously ending prospects of the adhesion of a European ‘Social Model’ in the post-communist periphery. The article is a contribution to an emerging debate in academic and policy circles concerning the viability and future of Europes ‘Social Model’ in an age of austerity.

Austerity as a global prescription and lessons from the neoliberal Baltic experiment

This article analyses the 2008 economic crisis and its outcomes for the Baltic states. It then gives a genealogy of European economic policy responses to the crisis, tracing them from the emerging ‘freshwater’ school of economics (e.g. University of Chicago) that arose in opposition to Keynesian theory. The more immediate cause of the 2008 crisis, long in the making, was its reliance on private debt to sustain economic demand in light of profit-enhancing wage suppression. Following the 2008 financial shock, European Union policymakers crafted policy that placed the burden of adjustment on labour. A programme of austerity was chosen in much of the European Union, at odds with the post-war European ‘social model’. This represented a retreat from the notion of a European project that encouraged liberalisation of economic policy but at the same time could be harmonised with a social dimension to create a distinctive ‘Social Europe’. Nowhere was this austerity more vigorously applied than in the Baltic states. Its effects are examined here, along with lessons to be derived from that experience.

American Public Policy and Full Employment: The Imperative of Martin Luther King’s Political Economy in the 21st Century

Martin Luther King gave no small deliberation to questions of economic policy. Policy and political economy debates have come full circle the past 50 years, returning precisely to the ideas King envisioned as necessary for creating a just and well-performing economy. Following King’s death, the “neoclassical consensus” reversed much of the economic thought of the classical economists (including 19th-century heterodox thinkers, such as the German Historical School, for example, Friedrich List; and the American School, for example, Simon Patten), Keynesians, and public intellectuals like King. Today, however, some economists such as Paul Krugman have signaled that important intellectual contributions have emerged from nonspecialists, who nonetheless possess great insight into economic thought. This article argues that King, while a nonspecialist, displayed great insights into the working of economies in ways possessing resonance for contemporary economic and public policy debates on employment, inequality, and even tempering political extremism of the type that marred the international order in the 1930s and of which we are seeing hints of today.

Russia, the United States and Ukraine in the Long Economic Crisis: Assessments and Prospects for the Developmental State

ABSTRACT The ingredients for conflict in Ukraine and a New Cold War were stirred in with the preparation of the post-Soviet order. More Treaty of Versailles than Bretton Woods, Russia was treated as the loser of the Cold War rather than strategic partner by the United States. This outcome was pre-configured by the global long economic crisis that began in the 1970s, along with the related challenges to the United States’ short-lived hegemony. Attempts to resolve these crises were in part handled through a “spatial fix” to further incorporate the post-USSR’s natural materials into global trade circuits in order to depress their prices. This model met with temporary success in the 1990s, but did not result in long-term solutions for the global economy and US attempts to create a unipolar world. This process has been in part inspected through the frameworks of Nikolai Kondratiev and Robert Brenner and concludes with a developmental-state proposal for Russia and Ukraine.

Die Gestaltung des neuen Europas nach der EU-Erweiterung: Rechtliche und politische Implikationen des 'Laval un Partneri- Streits' um Sozialstandards zwischen Lettland und Schweden

Abstract Der Beitritt der neuen Mitgliedstaaten aus Zentral- und Osteuropa zur Europäischen Union (EU) könnte durch die schwach ausgeprägten Gewerkschaftsstrukturen und den wenig entwickelten sozialen Dialog dieser Staaten die vorgeschriebenen Arbeitsstandards der Länder mit starken Gewerkschaftsbewegungen, wie Schweden, bedrohen. Dieser Artikel betrachtet die politischen, wirtschaftlichen und legalen Implikationen eines Arbeitsstreiks in der Bauindustrie, verursacht durch die Beschäftigung lettischer Arbeiter in Schweden durch die lettische Baufirma Laval un Partneri. Der Streit zeigt im Kleinen beispielhaft die wahrgenommenen Gefahren für die Arbeitsstandards, die sich durch die Osterweiterung der EU ergeben.