International

By Jimmy Dijk

Michel Albert was a French economist and former chairman of the French Central Planning Bureau. In his book “Capitalism vs. Capitalism”, published in 1991 - just after the fall of the Wall - he describes that two forms of capitalism have become visible. One is based on individualism, and the other on solidarity. He referred to the first as the Neo-American Model and the second as the Rhineland Model. We later came to call these two forms of capitalism the Anglo-Saxon model and the Rhineland model. It is fascinating to revisit this distinction and reflect on it.

For it is undeniably true that capitalism on the European continent has developed fundamentally differently since the Second World War than in the United States and the United Kingdom. According to Albert, the Rhineland model is developing on the European continent, where the free capitalist market is tempered by a democratically elected government and through consultation between social partners: employers' and employees' organizations. This stands in stark contrast to the development of capitalism in the United States and the United Kingdom, where the market is as unregulated as possible, the influence of the government, and certainly of employees' organizations, is limited or even actively opposed, and there is an almost sacred belief in the self-regulating nature of the market. The government is regarded with suspicion, seen as ineffective and inefficient.

According to Albert, the Anglo-Saxon model is focused on individual interests and short-term profit, while the Rhineland model emphasizes consensus and the long term. When you hear it this way, it seems that we in Europe have done quite well. Democratic control over the economy is in order, thanks to a strong government and good consultations between social partners. Everything seems fine. So should we just continue along the same path?
Then you don’t know the SP – or me, for that matter. Because, aside from the question of whether the distinction between the two forms of capitalism, as Albert outlines, ever truly existed, in the current era of extensive globalization of companies and capital flows, it is definitely no longer applicable. Since the 1980s, a form of capitalism that is much more based on the Anglo-Saxon model has taken hold of the organization of our world economy. This form of capitalism, sold with an ideological glaze of freedom for the individual, was labeled ‘neoliberalism’ in the 1990s. It is characterized, among other things, by extensive commercialization of public services, a reduction in the influence of organized labor institutions, and a significant curtailing of democratic influence on the economy.
And despite being told for a long time that Europe and the Netherlands employed the more sympathetic Rhineland capitalist model, the reality is different. Only those who were ideologically blind and deaf, or those who served other interests than that of society, dared to make such claims with a straight face. Because even in Europe, the neoliberal movement took off in the 1990s, dismantling our carefully built welfare states, putting our public services on sale, and hollowing out our social achievements. All under the euphemistic banner of free movement of people, goods, capital, and services. The SP has consistently opposed and highlighted the consequences of this neoliberalism. This ‘contrary voice of the advocates’ turned out to be ahead of the spirit of the times. But more on that later. First, I would like to discuss some of the consequences of this free movement of people, goods, capital, and services with you.

I will start with the last point: the free movement of services. This marked the beginning of the dismantling of the public sector, that which belongs to all of us, in favor of private profits.
For example, in public transportation. European regulations mandated that it had to be commercialized. Public transport companies were dismantled, and through public tenders, commercial companies could purchase the concession for city and regional transport, usually for a limited time. The consequences are easy to predict. The importance of good and accessible public transport was subordinated to whether it was profitable. After all, companies do not enter the market to serve the public good, but to make corporate profits and satisfy their shareholders with impressive profit figures and attractive dividends. Bus routes were scaled back or eliminated under the guise of efficiency or profitability, and the working conditions of bus drivers were cut. Public transport became more expensive, the quality decreased, and the pressure on drivers, train conductors, and ticket inspectors increased. Society lost control over public transportation. Only the shareholders benefited.

Our energy supply faced a similar fate. This also had to move to the market according to European rules. The network company that lays down the infrastructure had to be separated from the supply company. Not surprisingly, the network companies often remained public, as they primarily incur costs, and there is not much profit to be made from infrastructure. However, energy supply had to be placed on the market. The consequence: public energy companies such as Essent and Nuon were sold for a pittance. For energy supply, we then became dependent on German and Swedish companies, over which we have no democratic control. This was evident during the last energy crisis. While many Dutch households were struggling and could hardly pay their energy bills, we were using taxpayer money to fund an energy cap. Meanwhile, the enormous profits of energy companies like RWE and Vattenfall remained untouched. We literally transferred public taxpayer money to the profits of these companies. Not to mention the billions in taxpayer money for energy subsidies and emergency packages. This was also an indirect transfer of taxpayer money to the profits of these companies. Without any control, the Dutch government was powerless. People were deprived of their democratic control over this sector. The fact that this lack of control obstructs any form of a fair energy transition is so evident that I won’t elaborate further on it.

I have highlighted only two examples of public dismantling due to the 'free' movement of services. Just as easily, I could have discussed the higher education market, or public tenders in home care. Although this sell-off was partly driven by rules from Europe, it was often enthusiastically embraced by ambitious Dutch liberals, Christian democrats, and social democrats who declared it a kind of iron law and implemented it as the best students in the class.

Now, regarding the free movement of capital: You don't need to be an economist to understand that the 'free' movement of capital primarily serves those who own capital. This capital can roam freely in search of the best interest rates and the most profitable investments, and it can be withdrawn just as quickly when better returns can be found elsewhere. It makes our real economy entirely dependent on the shifts of money orchestrated by capital holders. They, the shareholders and investors, have increasingly gained power as a result. It is no surprise that the European Union counts 20 million millionaires and 500 billionaires. Since 2020, their wealth has increased by a third and now totals 1.9 trillion euros (that's twelve zeros!).

The downside of this free movement of capital is also painfully clear. In the quest for the highest returns, investors are buying properties as investment objects, while tenants pay the price for their profits. Private equity firms, in their quest for quick returns for their investors, are purchasing our general practices, stripping away the services, and cashing out. Patients are the victims, and our healthcare system is being disrupted as a result. The consequence is also visible in macroeconomic figures: the wealth of 99% of the EU population has, in contrast to the increase among millionaires, actually diminished. They are paying the price."

Now, let’s discuss the free movement of people. Of course, it’s quite nice that you no longer have to present your passport at every border. But we can no longer close our eyes to the negative and often inhumane consequences that this free movement of people brings. Naturally, I am talking about migration. And let me be very clear, for the SP, this also concerns labor migration. Our lead candidate for the European elections, Gerrie Elfrink, analyzed this very clearly in a debate on Radio 1: Whenever we raise issues about labor migration, those who benefit from it want to steer the conversation towards asylum migration. But I will not do that here. People fleeing from war and violence must be taken in. Period. That is what socialists stand for. But socialists also stand up when people are being exploited. And that is precisely what is happening with labor migration. We have been opposing this since we entered the House of Representatives.
I quote from the maiden speech of Jan Marijnissen in 1994:
‘People are being brought here from Poland, Ireland, and Turkey who work under, by our standards, shameful conditions, often still using middlemen, or as it is nicely put, manual wage companies. These people make no demands. They provide for their families back home because they have nothing to eat there. But the point is that the conditions under which they are being forced to work here are disgraceful and, in my opinion, absolutely do not belong in the Netherlands. Poor housing, low wages, long working hours; they are often victims of immense arbitrariness on the part of employers. This is simply exploitation.’
These practices remain unchanged. Our lead candidate Gerrie has experienced this firsthand when he went undercover as a labor migrant. Bad temp agencies profit from the poor conditions in these migrants’ home countries. The housing is deplorable and often illegal. These landlords don’t care about the pressure that numerous poorly paid men and women place on neighborhoods and villages without any facilities. This abuse of the free movement of people is, of course, interesting for companies and their shareholders. At one point, former state secretary Rutte predicted that there would only be 44,000 labor migrants in the Netherlands by 2030. Today, there are 1 million. Low-paid workers in the labor market push down wages. Not to mention the disruption this migration brings on a local level, but certainly on a European scale as well. Torn families and shortages in the countries from which our labor migrants come are replenished from countries with even lower wages. Is that why the EU wants to expand further to the edges? Thus, free movement of persons primarily means freedom for those who profit from it, and unfreedom and exploitation for those who do the work.

Regret
In recent years, we are hearing more and more from those who express regret, particularly from the social democratic or Christian democratic side. They regret their decisions to privatize important services. Or they now believe that ‘market forces have gone too far.’ They look back with a sense of humility and advocate for a revaluation of the Rhineland model, which places more value on collective success and long-term care. And while that model was indeed better, it is an illusion to think that it can withstand the disproportionately large influence of capital in the long term. I need only to point out the thousands of lobbyists from big businesses per Member of the European Parliament to give you an idea of the odds.
However, it can be an important first step. There is much to repair, rebuild, and improve. It is encouraging to see that the SP is at the forefront in various parts of the country in establishing municipal or provincial energy companies, where we reinvest the profits into insulating homes or installing more solar panels on roofs. It is good to see that the SP, along with other parties who now regret the sell-off, is making it possible for provinces to establish their own transport companies. This is the social progress needed to rebuild our public services. Because strong public services reduce inequality and strengthen our society and economy. This is good for all of us.
And while strong public services with good democratic oversight are important, this is only half the solution. Ultimately, particularly our economy will need to be significantly democratized. Extensive democracy, decision-making power, and ownership by workers in our companies are ultimately the best guarantee that the interests of those workers prevail over those of shareholders and investors. This is not something that can simply be accomplished in a parliament. It requires long-term social struggle. The struggle of workers united in trade unions and political organizations to build sufficient political pressure. That is not impossible; it has been done before. My party will always work with everyone who wants to build that democratization. Nationally, European, and internationally. Because ultimately, this change can only be the work of an organized international movement of people who derive their income from work or benefits. We will support and promote that movement in every area and every parliament at our disposal.

There is also increasing regret being expressed about the consequences of the ‘free’ movement of capital. But here too, the SP is taking the lead with its counter-voice. We recently submitted a proposal for an exit tax. A measure that ensures that taxes are levied on income and wealth in the country where they were earned. This way, the super-rich who leave the Netherlands or Europe to evade taxes still receive a blue envelope in their mailbox. Our proposal to lead in Europe in implementing this exit tax everywhere has been adopted by the House of Representatives. This eliminates the argument that wealthy individuals would relocate if a member state introduces a decent wealth tax, such as the SP’s proposal for a millionaire’s tax to tax fortunes over 5 million euros at 5%. It is time to redistribute our profits and prosperity. If we are to collaborate with other European parties, European trade unions, and organizations in the coming period, it should be on this issue. Because we know that adopted proposals must also be implemented. So let’s keep the pressure high and increase it further.
I have already been in contact with the Belgian Labour Party to tackle this together and develop it further. But I can very well imagine that we will expand this with parties like La France Insoumise and Sarah Wagenknecht's party in the coming period.
Because, just as with the privatization of our public services, the problems with asylum and labor migration, and the pollution of our environment and nature, combating division and inequality requires a national and cross-border approach.

Finally.
In this lecture, I have addressed the 'freedoms' of Europe. I have argued how these so-called freedoms have led to the privatization of public services, total freedom for shareholders and investors, and unchecked exploitation in the form of labor migration. Ironically, these freedoms primarily result in unfreedoms for the working class. I outlined a solution that transcends the old dichotomy of Rhineland versus Anglo-Saxon capitalism, with the core elements being the democratization of the economy and the fight against inequality.
Modesty is a valuable quality that our party should retain. However, while many of those responsible for the neoliberal misery have only recently begun to express regret, I can proudly and justifiably state on behalf of my party that we were the first to identify these problems, analyze them, and propose alternatives.
However, being right is different from being heard. To bring about change, you must believe that another Europe is possible. A Europe that puts people at its center. That respects democracy. And that does everything in its power to improve the socio-economic circumstances of people. Giving in to despair has never brought about change. On the contrary: the left has been too quiet for too long, and the right is now reaping the rewards. They generate profits for those who already have more than enough and do not deserve it. This is already happening in the Netherlands, but also elsewhere in Europe. This is not the time to give up; this is not the moment to complain in a moralistic tone about how bad everything is. That approach alienates people and fails to take their concerns seriously. The way forward is to critically evaluate plans that hinder social progress. Along with that, we must present strong and clear alternatives. In the Netherlands and Europe.

Because let the outcome of the elections in the Netherlands and the formation of this government serve as a warning for wealthy right-wing interests. We see that the PVV, together with the VVD, BBB, and NSC, is distributing two billion euros in handouts to shareholders, investors, the wealthy, and companies with record profits. We see that they allow income and wealth inequality to increase, do not combat poverty, and even allow child poverty to rise. We see them cutting one billion from our healthcare. One billion from our education, and one billion from our social security. Once again, the motto of wealthy right-wing interests is the market for everything and everything for the market. It is clear which interests these parties serve.

On a European level, they will serve exactly the same interests. By pitting people against each other and dividing them, they will grant capital all the freedom while failing to redistribute our collectively built prosperity.
It is therefore crucial that the SP is once again represented in the European Parliament. Because our fight for progress and redistribution is the answer to the right-wing politics of division and decay. Because our analyses, alternatives, and actions are essential for the future of European cooperation. Because our politics prioritize people, not capital.