SHOULD THE MUSICIANS CONTINUE TO PLAY?

Look around, and Europe is in crisis. At the time of writing, Greece, Ireland and Portugal are on the verge of an economic and social abyss, severe doubts about the very future of the European Monetary Union are growing, and austerity packages are being implemented across the European continent. Centrifugal political forces are on the rise, just as are xenophobia, racism and social exclusion. The promised lands of the most competitive and dynamic knowledge-based economy in the world, an economy capable of sustainable economic growth with more and better jobs and greater social cohesion – as envisaged by the European heads of governments in March 2000 at their European Council meeting in Lisbon, Portugal – seem to be further away than ever before. It would be difficult to find believers in this noble vision of a sustainably growing and socially coherent Europe nowadays in any country of the EU, let alone in countries like Greece, Ireland, Italy, Spain and Portugal. Even in the richer, developed European countries of the old economic centres, pessimism is on the rise. However, for the quantitative social scientist, profound economic crises (the Great Depression of the 1930s, the 'oil crisis' of the 1970s, the current world recession) always seem to be appropriate times for reconsidering basic principles of economics and the social sciences.

Always, such times were also propitious to discover or rediscover the fact that unequal relationships profoundly characterize the world economy and that the effects of dependency and the role a nation plays in the world system profoundly affect the economic and social trajectory of a country. On 27 February 2007, we read – among the already visible, terrible icebergs of the looming current economic crisis – the following truly 'Titanic scenario' about the mindset of European central bankers in the International Herald Tribune (IHT): they, according to the IHT, think that the European Central Bank may be forced to raise interest rates if higher wage demands fan inflation (International Herald Tribune, 27 February 2007).

Should the musicians then continue to play? Like on the Titanic on 15 April 1912? This book starts from the assumption that the world can learn a lot from the empirical and theoretical debates and research results of dependency and world-systems research. The European 'political class' seems to not react at all to the implications of the global economic crisis. In a strategic document of the European Union, or if you wish in Brussels newspeak, an 'EU presidency country non-paper' (what jargon!) produced in 2009 by the Swedish government, then holding the rotating EU presidency, we even read that trade and economic integration, combined with new technology, brings new markets, competitors and trade partners closer. They help to decrease poverty, promote democratic values and increase international stability.

If there is continuity in Brussels' thinking ever since the mid-1990s, it is this credo about openness as the main precondition of global ascent. What about the role of, say, internal consumption and investment? The promised lands of free and open markets, always hidden somewhere in the foggy mists of the today's, are at the real centre of European policymaking. Already in March 2000, the EU aimed at its Lisbon 'European Council' to make the EU 'the most competitive and dynamic knowledge-based economy in the world capable of sustainable economic growth with more and better jobs and greater social cohesion'. The very same neoliberal agenda, already then the strategy to achieve this ambitious goal within a decade, is now being applied again. The European Commission at Brussels itself now freely acknowledges that this 'Lisbon agenda' or 'Lisbon Strategy' largely failed, but it does not provide any real more far-reaching explanations for this failure. Instead, it applies the same old medicine again to the ailing patient.

The European Commission itself conceded in one of its main documents on the subject recently that even before the crisis of 2008–9, there were many areas in which Europe was not progressing fast enough relative to the rest of the world. The strategy, proposed by the European Commission in this document on a 'strategy for smart, sustainable and inclusive growth' is relatively simple. The policy package offered by the European Commission has only three pillars. Guess what pillar number one is? Open economies! We go on to read that Europe will continue to benefit from being one of the most open economies in the world but competition from developed and emerging economies is intensifying.

In this book, we will systematically confront this type of thinking with macro- quantitative evidence on a global scale to show that a strategy, based on unlimited openness is not the solution, but very often part and parcel of the very problem of the European decline vis-à-vis its major global competitors. We will try to find out by macro-quantitative comparisons how the neoliberal agenda will most probably affect policy outcomes during the next decade, judging by the knowledge of cross-national research on how the main drivers and bottlenecks under scrutiny here have already affected these processes over the last decade or two.

Analysing the policy failure of the 'Lisbon Strategy' 2000–10 and the prospective policy failure of the 'EU-2020 strategy' has important implications not only for Europe, but for other major regions of the world economy as well, such as East and South Asia, advanced countries in the Middle East and North Africa and in Latin America, still confronted with the a semi-peripheral status in the world economy. Is the opening of markets the only viable strategy to catch -up with richer countries?

So, we will start the debate by comparing the trajectory of the EU-15 with the USA and some other highly developed Western democracies in terms of their globalization, their economic growth performance, their unemployment performance, and their inequality. New, universally recognized and reliable time series data, now available in the comparative social sciences, make such comparisons possible. The use of time series data and methodology about globalization and social performance opens up depths of analytical insights, hitherto unknown in the debate.

Graph 1, accordingly, highlights the development history of the old core of the European Union by comparison with the USA as the centre of the world economy and some other developed Western democracies. Globalization refers to the time series data,...