Dr Carlos Robles Piquer, Former Minister for Science and Education, Spain

The two models, which we are comparing here, only differ by one word: the North American model (and, to a high degree, the British) could be defined as Market Economy; while the model which predominates with certain nuances in the continental Member States of the European Union includes the adjective Social in its definition, which specifies the noun Economy, although the "Swedish Model" has introduced public controls and guarantees new protections that go beyond and surpass those applied in the rest of the Member States. This difference is explained in many studies; to make my point clearer, I would like to quote from a book published by Philipps Universität of Marburg in 1985 and re-edited in 1991, titled "Grundbegriffe zur Ordnungstheorie und Politischen Ökonomie." The Foundation Konrad Adenauer did us the service of publishing it immediately in Spanish. The book shows very clearly that we are dealing with two subsystems of one big system formed by the private market economies as opposed to the systems formed by the socialist economies, both those which admit the role of the market (we could mention the examples of Yugoslavia and Hungary) and those which, true to their doctrine, insisted on centralised planning.

The sounding failure of both types of socialist economies implies that not even the European parties that call themselves Socialists continue applying these formulas. Politicians and experts of the British Conservative Party and the German Christian Democrats met in June of 2000 to analyse together the Social Market Economy and to reaffirm their shared loyalty to this system. They celebrated the fact that "the European Social Democrats are trying to emancipate themselves more and more from the ideological burden of their socialist past." The truth is that the Third Way of Blair and the resignation of Minister Lafontaine justify this ironic welcome offered by Conservatives and Christian Democrats at this meeting to other parties which "also compete for the political centre." I remember with admiration the excellent speech delivered by the Portuguese Prime Minister Antonio Guterres, leader of the Socialist Party of Portugal and then President of the European Council, at the opening of a Conference organised by Spanish entrepreneurs last May in Madrid. He confessed that we were clearly lagging behind the United States in terms of Economy of Knowledge although he assured that we could close the gap; and most relevant for today's topic were his two clear affirmations of the necessity of reforming the economy to improve our competitiveness and of raising the employment rate, which is much lower than in the United States. With a frankness unusual from a Socialist head of government, the Prime Minister added that "we have to reform our systems of social protection" in order to be able to guarantee their future sustainability. A demographic pyramid characterised by an ageing population surely asks for serious studies in this field.

I have to say that the inclusion of the adjective Social in the definition of Market Economy has an indubitable merit. And, even more importantly, we cannot renounce to it, at least not in Europe. I believe that the definition of this political school given by Dr. Hans-Günther Krüsselberg in the book mentioned above is perfect, as reflected in the following words which resume the concepts of the School of Fribourg: "An economic order has to develop on the basis of its capacity of performance which is linked to justice and social security by the Constitution." I have the honour of presiding a Foundation named after Cánovas del Castillo, without doubt the statesman and government member with the greatest influence in 19th century Spain. In 1890, one year before Leo XIII proclaimed the Encyclical "Rerum Novarum", Cánovas said in a speech that in order to help the weak there existed the need of "an organisation complementing individual initiatives, which emanates from the big social powers." Soon afterwards he added that "the State has to intervene in the social or economic order to such a degree as requires the necessary welfare of men socially united." Cánovas was the founder and inspiring force of a party that called itself liberal conservative and was loyal to the teachings of the Roman Church, as was then the vast majority of Spaniards. This reference to "men socially united" is without doubt very progressive for the mentality of his time. But Cánovas not only made speeches; as opposition leader, in Parliament he proposed laws on Sunday rest and special protection for working women and children; he presided the first Commission on social reforms which later on became a public Institute of the same name.

Now, is the social economic doctrine we defend free of risks, errors or problems? Certainly not. And these dangers and deficiencies are becoming even more obvious as economic life is becoming more and more universal and opens up to foreign markets, which means globalisation, let's use this inevitable word. A visible sign are the dozens and sometimes even hundreds of immigrants who cross the strait of Gibraltar every day to meet an uncertain destiny on the shores of Andalusia, or reach the Canary Islands in fragile boats in their legitimate search of a less infamous, less miserable life. Similar things occur at all other borders of the Union. We have to ask ourselves: are our economies and societies able to integrate them without creating severe problems for the economy and the simple coexistence of different customs, languages and races? Without any doubt, they should be able to do so; but we know that we are not always able to live up to our ideals.

Furthermore, there are many internal problems. Let me explain this by giving you a resume of a practical case that alarmed me a lot when it became known at the beginning of 1999. A village in the Murcia region, located in the fertile gardening area of Southeast Spain, reacted with vehement protests when the government, implementing the law, decided to repatriate a group of nearly four hundred immigrants from Equatorial Guinea who had entered the country as tourists and didn't have working permits. The investigation by a newspaper showed that those immigrants were employed in intensive agricultural labour, which is no longer performed by the natives, many of which received in the meanwhile unemployment subsidies as if they weren't able to find a job. One of these Murcian farmers did not hesitate to declare that, years ago, he had had to work in horticulture in the south of France and that finally the moment had arrived when others should work for him. To be honest, I have to add that most of the immigrants still live in the village that offered them work and salary. Motivated by this and similar other incidents, we organised a seminar on employment in Spain, inviting several high level experts. In the resume of the speeches and discussions of this seminar, which we published, professor Juan Iranzo, president of our Council of Economic and Social Affairs, wrote the following: "Beveridge, the father of the universal state of welfare, suggested that an unemployment subsidy should not be a negative incentive for job decisions. Nonetheless, in Spain we find many circumstances that are an incentive for fraud or discourage employment." Personally, I'm sure that Spain is no exception in this field. The consequence of the very generous unemployment subsidies (called by some of the benefited humorously "to work on the dole") is-among others and according to the contribution of Professor Antonio Argandoña to the above mentioned study-that this security "keeps unemployed very little interested in returning to the market."

I'm afraid that the most visible difference between the economy of the European Union and the Anglo-North-American economy is the high unemployment rate in Europe and the proven capacity of the other model of reaching full employment. This is mainly due to the European system of social protection, the fundamental pillar of our State of Welfare. The reason behind it is that our system, though without any doubt the more humanitarian model, encourages a tendency towards total or relative indolence among a considerable percentage of our citizens. I can't help quoting the latest declarations of the singer Madonna who, as you all know, lives in London, a city which in this aspect does not differ essentially from those on the other side of the Channel. Madonna could not understand the long annual and Christmas vacations, nor that her employees interrupted their work as soon as their working day officially ended. Without any doubt, the life of London employees is therefore much more agreeable than the life of their New York colleagues, but we should not be surprised at the fact that less dedication to work leads to less productivity, less jobs and finally less wealth. I've always thought that work is not a cake of invariable size, the slices of which we have to distribute in a struggle between all dinner guests, but a living being, a process in progress, and we all can contribute to enlarging and augmenting it with our efforts. In the seminar which I've mentioned before, the German economist Juergen B. Donges said: "If we all work less, we all will have less income, less acquisitive power and, therefore, less capacity of demand." It seems to me that we have to keep up the old and reasonable faith in the creative capacity of the Homo Faber, the man who creates, who constantly does something with his hands and his talents. To stimulate his willingness to work and his creative capacity, and not to discourage him from making an effort is the aim of all good economic policies.

Surely, on the occasion of the Nice summit a few days ago, we have all seen the big demonstration asking for work for eleven million Europeans who are unemployed. It is a petition that all of us should join; but we must do this by putting into practice measures which lead to the creation of these new jobs within the framework of a social market economy, but without losing sight of the experiences of those who, in other places, have solved the problem in better ways than ourselves, the more or less united Europeans of the old continent. A little modesty and a lot of crude realism during this apprenticeship would not do us any harm.

Well, my impression is that everything interesting has been said from this side of the meeting. But even so I would like to add a few comments. First, in a few days time, in less than 20 days, we are going to pass from one century to another. That's a very important factor for life. My impression is that at the end of this millennium everything is changing. We are living in a changing world. When I was a young boy I remember that members of my family or acquaintances of my family where people who were born in the same village, where they also died. This is rare now. People move from one place to another. Either because they want to work or even just for holidays. This is certainly a new fact of life. We have to adapt.

My impression is that the differences between the Anglo-American system and the European system are not so deep, not so important. We are learning from each other and that is very good. We have to learn a lot from the Americans because they have more flexibility, they are more active, they grow more, they produce more jobs and finally, their economy is at least now, stronger than ours. Our economy is too restricted. We have too many limits. Of course we need limits and regulations during crises. We have to combine this protection with flexibility.

It is true that globalisation is a fact of technology. That is why we cannot avoid it and we cannot protect it. But we have to accept that we are now living in a global village. We have to adapt to this. The problem is that globalisation is very unevenly shared. That is why we have to assure that we live in the good part of the global village. And we have to be concerned by the plight of the people who live on the other side. It is a very sad fact of life that, as was written in a recent study, six individual people in the world are richer than 25 national countries. This is unacceptable and we have to fight against uneven distribution of wealth. We have to do it because we are the richer side of the world. This is another element to have in mind when we think about the world's problem and how we can make a difference. This is more or less what I wanted to add.