We must have cultural roots - but above all we need wings to bear us into the future.
The Parliament of Finland has wished to assume an active role in the discourse on the future of the nation. It has obliged the Government to submit a report on the future once each parliamentary term. In it, the Government defines its perception of the country's future and of the measures that will be needed over a time span of 5-15 years. Parliament has appointed the Committee for the Future to deliberate and reply to the Government's report. Parliament deliberates the Committee's report in session and adopts it with any amendments that have been made, whereupon it becomes a resolution of Parliament binding on the Government.
A further task of the Committee is to assess the social impacts of technological development on behalf of Parliament.
Parliament received the first report on the future in 1993. The Committee deliberated and replied to the report the following year. This time, the Government's report on the future is in two parts. The first, "Finland and the Future of Europe", was submitted to Parliament in autumn 1996 and the second, "Fair and Bold - A Finland of Responsibility and Expertise", which concentrates on our own country, in April 1997. This report by the Committee is its response to the first part of the Government's report.
The Committee has outlined the factors on which future success will be based and proposes measures, which Parliament approved during the session at which the Committee's report was deliberated, intended to enable us to grasp the helm of the future.
The Committee hopes its report will prompt an open and inspiring discourse on social models. We urge Finnish decision-makers to follow developments not only in Europe, but also in the rest of the world. By comparing present models with those looming on the horizon, Finland must choose and carve out the road to be followed. Passively waiting is dangerous.
It is useful to remember the past, to assess and analyse it, but the future must be made now.
Helsinki, 15 May 1997.
Riitta Uosukainen
Speaker of Parliament
Martti Tiuri
Chairperson of the Committee for the Future
Government and Parliament in Dialogue on the Future
As is the case all over the world, the basic tasks of the Finnish Parliament are to enact laws and approve the state budget. In spite of national difference, the division of labour between the governments that draft laws and budgets and the parliaments that approve them is approximately the same in all Western countries: governments submit proposals, which parliaments deliberate and adopt. The members of a parliament have the right to initiate legislation, but in practice the role of a parliament is to endorse initiatives or make minor amendments to them.
In periods of social transition, parliaments have far too often been left in the background relative to other actors. Quite many parliaments are engaged in a feverish search for ways of strengthening their status as representative institutions, to enable them to regain their position in the focal point of political discussion. That explains why so many attempts are being made to revise the ways that parliaments work and revitalise the discourse centred around them.
One method that has been developed in Finland is the presentation by the Government of reports to Parliament. Rather than introducing legislation in Parliament, the Government submits a report on some or other important social matter, such as rural development, energy policy (including the construction of nuclear power stations) and participation in EMU. This means that problems can be discussed within the context of bigger totalities than legislative proposals permit and above all in good time, when they are of topical relevance or can be pre-emptively influenced.
Dialogue between the Government and Parliament in the case of reports follows largely the same lines as with other legislative drafting. After a general debate in the chamber, the matter is referred to special committees for deliberation. The committees hear the views of experts and draft a report, which is presented in session. There it is either adopted or rejected, in addition to which riders or demands that the Government undertake certain measures can be attached either unanimously or following a vote. However, a report can not serve as a basis for a parliamentary vote of confidence in the Government.
Finnish parliamentary committees do not employ the rapporteur system with which we are familiar from the European Parliament. Instead, each committee has 17 members, all Deputies, who collectively draft the stance to be taken on each bill, budget, bulletin or Government report. All of a committee's reports are drafted as a result of cooperation between the 17 members. All members assume collective responsibility for them, unless a dissenting opinion on some part of a report or a proposal that it be rejected altogether has been recorded. This report by the Committee for the Future, a reply to the Government's report, was unanimous. It was also adopted in session without a vote.
The formation of the Committee for the Future is the latest means found to strengthen parliamentarism and political discourse in Finland. By replying to the Government's report on the future, arranging seminars and through other measures, the Committee can prompt a highest-level debate on general or special themes that would otherwise remain in too disadvantaged a position in political discussion or in relation to which the role of Parliament might be merely the passive one of waiting for a proposal from the Government.
TuVM 1/1997 vp - VNS 3/1996 vp/Eng
On 2 October 1996, Parliament sent the Council of State (Government) report part 1 VNS 3/1996 vp "Finland and the Future of Europe" to the Committee for the Future for deliberation and preparatory drafting.
The following persons have appeared before the Committee, which has heard their opinions: Minister Arja Alho, Project Director Paavo Löppönen, Docent Jan Otto Andersson, Professor Risto Eräsaari, Professor Eero Holopainen, Professor Antti Kasvio, Professor Eero Paloheimo, Professor Eino Tunkelo, Research Professor Jouko Tuomisto, Professor Osmo A. Wiio, Technology Director Markus Koskenlinna of the Technology Development Centre (TEKES), Research Director Matti Kärkkäinen of the Finnish Forest Research Institute, Doctor of Philosophy Hannu I. Miettinen, Doctor of Political Science Juha Siltala, Doctor of Political Science Osmo Tuomi, Licentiate of Political Science Jaana Venkula, Mayor Elina Lehto, Managing Director Asko Siukosaari of the Finnish Association of Advertising Agencies, Managing Director Kalevi Sihvonen of the advertising agency Brand Sellers DDB Oy, Managing Director Pekka Ylä-Anttila of Etlatieto (Research Institution of the Finnish Economy), Researcher Ilkka Tuomi, Editor-in-Chief Erik Wahlström, Editor Sari Kuvaja of the Green Cultural Association, Editor Johanna Karhunen, Special Researcher Teija Tiilikainen of the National Defence Academy, Consultant Counsellor Olli Saarela of the Ministry of Education and General-Secretary Reijo Viitanen of the Ministry of Education's advisory committee on youth affairs.
On 5.2.1997, arising from the Council of State's report on the future, the Committee arranged a public hearing for political parties at the Parliament Building. Those whose opinions were heard were: Sanna Vallinen, member of the executive committee of the Social Democratic Party, Esko Aho, Chairman of the Finnish Centre, Maija Perho, Party Secretary, and Juha Rintamäki, Deputy Chairman of the National Coalition Party, Satu Hassi, Member of Parliament, and Sirpa Kuronen, Party Secretary, of the Green Union, Kalevi Suomela, member of the working group on the future, of the Union of the Left-Wing Alliance, John Burstein, political secretary, of the Swedish People's Party of Finland, Milla Kalliomaa, Party Secretary, of the Christian League, Janne Jutila, managing director, of the Young Finnish Party, Urpo Leppänen, M. Pol. Sc., of the Basic Finns, and Olli Hunkuri, apprentice, of the Virtanen parliamentary group.
As part of its work of following the development of globalisation, the Committee has also arranged video seminars with countries or regions that are of major significance from the perspective of international development and/or represent those that seem set to enjoy success in the future (Success Models part 1: South-East and East Asia 1996). Further seminars will be arranged with at least China, Latin America and the state of Wisconsin, USA. With the latter, which resembles Finland in certain respects, a penetrating comparative study of sub-factors in success, such as employment, will be made.
Perspective, working method and remit
The report drafted by the Committee for the Future will create a basis for assessing the future of Finland. The matters afforded most attention in it are the trends, opportunities and threats affecting the future of the world and Europe.
The more comprehensively phenomena with a bearing on future developments can be brought into the political debate - and even occasionally expressed in extreme terms - the more fruitful will be the foundation created for an examination of Finland's future. For that reason, the Committee has striven for a presentation that includes views from many quarters and in part even prompts contradictory feelings.
It has been difficult to delineate the scope of the study. The Committee has consciously concentrated on economic issues and themes closely associated with them. The most demanding challenges facing us at the moment arise from the economy.
The scope set does not mean that the Committee regards such matters as the environmental challenges facing the world and population problems as being of lesser importance. Environmental matters and demographic developments were dealt with extensively in the Committee's previous report (1994), and it was decided to choose a different emphasis on this occasion.
Less attention has been devoted to security policy, because it has been the subject of a separate government report. Since Parliament has a separate committee for dealing with matters relating to the European Union, this aspect has likewise been given little attention in this report.
The Committee has chosen success - success on the part of Europe and consequently also Finland in the third millennium - as its leading theme. For purposes of comparison and to open up the discourse, the Committee has established links to research institutes abroad and to other individuals and bodies that are considered to have knowledge and insights of significance from the perspective of assessing the future of Finland.
A prerequisite for success is recognition of trends and the atmosphere in and threats to the economy and society more broadly - also of those features that can not be considered desirable from the perspective of welfare. They have been described as challenges, to which we must be able to produce an effective and timely response.
The report and the ensuing parliamentary debate on it create a good foundation for deliberating the state of our society and its development.
A successful dialogue between the Government and Parliament on the subject of the future will add further value to the fact that Finland is a pioneer in this segment of parliamentary work. Activity on the part of the Government in presenting initiatives will be a basic prerequisite for the success of the dialogue. The Committee emphasises the importance of developing new forms of parliamentarism.
Finland differs from other countries in having no "think tanks" - institutions devoted to political assessment and analysis - if one disregards those engaged in economic research. At its best, the future-related work associated with this report, and which assumes many forms and involves experimentation with new modes of work, will fill that gap.
In the view of the Committee, the Government's report is in part too narrow with respect to the premises on which it is based. First of all, Europe is understood mainly as being the European Union only. Secondly, world-wide problems, which Europe and Finland share in a globalising world, have not really been dealt with. Globalisation has been analysed well as a concept, but its significance has not been adequately internalised.
On the basis of what has been outlined above, the Committee has considered it most appropriate to take the discourse forward in those areas that have either not been touched on at all or else are dealt with too narrowly in the Government's report.
Prediction, preparation and taking matters in hand are virtuous things. But they are not enough on their own to ensure success, that the preconditions for a good life are satisfied. In order to be able to sustain development and build up welfare on a basis of equity, we must strive to be in the vanguard of development in the fields in which our expertise is strong. We must grasp the helm of the future. That is a condition that must be met, by both Europe and Finland, by states and peoples, to ensure success in the coming millennium.
Although in many respects governance of the future means sensible adaptation and wise adjustment, the starting point must be an initiative-generating endeavour to guide and direct future development in a way that enables ethical and ecological goals to be implemented.
As part of Europe and as part of a globalising world, we Finns must make choices on a daily basis. It is to be hoped that the best possible knowledge of what is being chosen and on what grounds, and of what kinds of consequences can result will form the background to the choices made. Only in that way will those who make decisions in companies, various bodies in society and families be able to bear their genuine responsibility for ethically and morally sustainable development.
Rapid technological development in the industrial countries has led to a situation comparable to the Industrial Revolution. The industrial society that has been in existence for a couple of hundred years is in transformation into a knowledge society. What is that? It is above all a society in which knowledge and skills have become raw materials and their importance as success factors surpasses the other factors of production. Knowledge is systematically applied in the functions of the society. New knowledge is acquired by means of scientific and applied research.
Knowledge itself is not what matters most, but rather the way in which it is used. Like any other instrument, it can be abused. The ongoing transition from an industrial to a knowledge society means a society of expertise, insights and understanding.
A society, a company or any other player is efficient and dynamic if, in a swelling flood of information, it is able to refine and exploit data. Analysing information is becoming increasingly important.
The problems of the transitional period are complex. From the perspective of the whole planet, a vital problem awaiting a solution is the state of our environment. In industrial societies, a rising standard of living has been regarded as a more important goal than sustainable development, even though there has been an awareness of the extent and gravity of environmental problems for a long time. Advancing climate change and associated problems like a weakening of the Gulf Stream and dwindling biodiversity, acid precipitation that is harming the environment and emissions of fine particulate matter that are endangering people's health, are global in scope. We have not made much progress beyond a beginning in solving them. The advance of the knowledge society and intensifying international cooperation provide new means of finding solutions. Nonetheless, solving problems will require changes in attitudes and structures, enormous inputs of financial and other resources as well as agreements that are observed.
Global development-related questions await resolution. We are consuming natural resources at an accelerating rate beyond their capacity for renewal. Production and consumption structures as well as the economic systems that regulate them, and which do not take account of environmental costs, are, together with population growth, accelerating depletion of natural resources and at the same time exacerbating local environmental problems. The disappearance of forests, desertification, erosion, water pollution and soil chemicalisation are consequences of unsustainable development. In the future, incorporating the environmental perspective in economic activity will steer development in the right direction.
Growth of the global population and increasing consumption have demanded that an ever greater share of the original natural environment be diverted to the use of humankind. This has led to the threat of a loss of biodiversity. Population growth has begun clearly slowing down in recent decades, but it is probable that the global population will reach nearly double its present level before growth ceases. A reduction in levels of poverty both globally and locally is a prerequisite for bringing population growth under control. Because population growth is fastest in the developing countries, the main focus of attention must be on helping and supporting them.
In the industrial countries, the development of information technology and automation has led to the number of workers in the industrial sector falling rapidly at the same time as output is growing strongly. Structural mass-unemployment has afflicted many countries. However, as old jobs have disappeared, new ones have constantly emerged to replace them. The problem is that the supply of labour and demand for it do not meet each other.
The globalisation of the economy has already reduced the opportunities available to nation-states to assume responsibility for their citizens' wellbeing. More and more important decisions are being taken on an international level beyond the reach of nation-states, mainly within the circles of economic players. The governments and parliaments of individual countries can feel that they have been relegated to the role of mere yea-sayers and accommodators, even though in fact they still have opportunities to act. In the final analysis, responsibility for the course chosen always resides with the political decision-makers. Democracy and the political system can not be kept healthy for long unless, alongside a globalising economy, we can develop on an equivalent level a democratic system of control and monitoring that guarantees ecologically and socially sustainable rules of operation for markets and leads to a more equitable distribution of resources globally. The credibility of political action is weakening - the legitimacy of decision-making is declining to too low a level - in relation to the problems that need to be solved.
Globalisation in all of its extent is challenging nation-states to revitalise themselves. Many important matters, such as environmental protection or the ground rules of the international economy, require decisions on the level where the problems appear. Therefore there is a need to develop decision-making in global and large-region contexts. The national political system must be developed in a way that enables us to steer the formulation of decisions in the direction we wish, even if those decisions are taken outside our own country. As globalisation advances, care must also be taken to ensure that national democracy is strengthened to enable it to function in the knowledge society.
The more difficult the problems that Europe and Finland have to face in the future, the more important the effectiveness of the political system and its capacity to function will become. Without people, their contributions and support, we shall not be able to cope with the transition phase in a manner that respects our European heritage.
Always present when the future is being assessed are the menacing images to which powerful change gives rise. The present decade has seen books that describe the end of history, the end of nation-states, the end of work and the end of democracy achieve global success. Presenting future threats is often essential in order to get a serious discussion started, but it must not be an impediment to active action and will in efforts to bring about change. Future changes will not happen on their own; people will make them happen. Hope and trying - to the end, time and time again - are the foundations of human existence and the sparks and accelerators of change. Values that incorporate responsibility for people and the environment and wise governance of affairs will keep change on the right course from the perspective of people, even if that change does not happen in the way that we would wish or have predicted.
2.1 Four permeating success factors: globalisation, knowledge and technology, the human aspect in innovation, and governance of matters and of life
In its deliberation of the Government's report on the future, the Committee for the Future underscores the importance of the prerequisites for success that Europe and Finland must satisfy. If the continent and its peoples are to be prosperous, all will have to contribute their work and there must be a more even division of labour. Only with the aid of work will it be possible to utilise all of the resources available and thereby ensure the future prosperity of us all.
The Committee takes the view that the future of Europe and Finland will be determined by the general development of the whole world. The lines chosen by the Finns and the Europeans will influence the global development. Thus we also bear moral responsibility for the effects of our choices on the rest of the world around us. Already discernible in this world of internationalism are factors that appear to transcend the others and that are presumably so powerful that they influence all other factors. They are:
1) globalisation
2) information and technology
3) the human aspect in innovation and
4) governance of matters and of life
Each and every one of those all-permeating factors with an influence on success in the future has a background assumption of tough - downright merciless - work and competition. However, success must be seen as a concept that is considerably broader in compass than economic success. Success on the part of an individual or of a community is the achievement of the goals that they themselves have consciously, and in part unconsciously, set. Success by a society means providing the preconditions for a good life for citizens. Improving opportunities for citizens to participate and increasing equality, environmental sustainability and fairness are characteristic features of a successful society.
If the assumption that globalisation together with knowledge and technology will be of decisive importance for the development of third-millennium Europe is along the right lines, the successful will be those peoples, companies and individuals that prepare for them best. And if the assumption that internationalism and technology based mainly on new knowledge and skills will permeate other sectors of production and determine the other conditions of communities' and individuals' success is correct, we ought then to be able to prepare by means of research, training, investment and attitude changes on all levels and in all quarters in society. Unlike in the past, it will not be enough in the future for an economic or political elite to be aware of the course being followed. As many citizens as possible will have to be able to take part in determining and making change in the fields of the economy, science, politics and civic activities.
Change will be difficult, because it will not be limited with respect to extent, depth, geographical scope, time or other factor in the same way as, for example, during the period of industrialisation in the 19th century. Industrialisation advanced fairly slowly in time and place. National governments and leading figures in economic life were able to steer it. Distortions and mistakes could be corrected by means of national economic, tax and social policies. Globalisation, guiding and monitoring new technology and the other major factors of transformation, is problematic also because the traditional instruments are no longer at our disposal. The significance of the guidance and decision-making mechanisms developed by nation-states in the course of the past hundred years to regulate the economy, production and implement, for example, social equality has declined and new means are not yet sufficiently developed. The new players are not always physically identifiable, they are not linked to any state, they have neither homeland nor domicile, nor do they necessarily embrace the same moral and ethical values as today's players. Rather than goods, exchange - and with it prosperity - are founded on expertise, knowledge and skill. Of course, these are often transformed through a complex process into physical production of everything right down to everyday consumer goods.
The prosperity of Europe is more and more clearly dependent on how the rest of the world develops. In the view of the Committee, global development factors should have been examined in the Government's report rather than merely focusing on Europe.
Wisely adapting to globalisation and technological upheaval will be enough to ensure that Europe survives. Success will demand more. There will be a need for new ideas, inventions, models of thought and above all their implementation, i.e. innovations. A renewal of society must be carried through. That process of renewal must apply to both individuals and communities. Europe has the special moral responsibility and privilege to be the birthplace and developer of a humanely and ecologically functioning society and economy. Europe is also the cradle of the Industrial Revolution and globalisation. That is why we are the first to encounter the employment, welfare, environmental, economic and other structural problems that are now afflicting the industrial society.
Keeping a society innovative is not an easy task. The degree of innovation can dwindle imperceptibly also in societies where economic indicators and other criteria of wellbeing have always been among the best. In many respects, Sweden has been regarded as one of the more successful states in the 20th century and a pioneer in several fields - including social innovation. When the World Bank and the OECD published GDP per capita statistics at the end of 1996, they showed that in only a few years Sweden had slipped down the scale from being the world's sixth-wealthiest to 20th, placing it among the poorest states in Europe. All who have visited Sweden can see with their own eyes that GDP per capita figures do not tell the whole truth about the country's level of prosperity. Nonetheless, the statistics sparked off an extensive self-critical debate in Sweden. The causes of the problem were pondered in the editorials in the country's main newspapers. The main argument presented was simply that Sweden has become a society where ideas fail to take wing and get nowhere.
Although the success of Europe and Finland was chosen as the point of departure for the Committee's report, that does not amount to adopting the position that the future is to be examined only in the light of economic success. There must be a continuing discourse on what kind of success, growth and progress the people of Europe should strive for in their economic and political actions. For what purposes should science and technology be harnessed? How can economic growth be increasingly immaterial rather than material?
Satisfaction of people's basic needs must be guaranteed for present and future generations on a basis of sustainability. That means that 1) the pace at which renewable natural resources are used must not exceed the rate at which they are replenished; 2) the rate at which non-renewable resources are used must not outstrip the rate at which sustainability-based substitute materials and products are developed; 3) the level of emissions must not exceed the capacity of the environment to absorb and neutralise them; and 4) humans must not through their own actions accelerate reduction of biodiversity.
A development of the kind described in the foregoing prompts us to assess the fourth basic factor on the basis of which success will be determined in the future. If globalisation and technology can be described as being (looked at from the perspective of the individual) development features that apply rather like a natural law, and which we in Finland can influence to only a limited degree, the unifying factor in them, and one that is based on the activities of people, must be highlighted as being governance of matters and of development.
Governance is a combination of the many means by which individuals and communities, private and public, arrange their common affairs. It means constant effort, in which conflicts and different objectives are reconciled and resolved. Governance includes official institutions that have been given the power to arrange matters, if necessary using coercion as a final resort. It also includes unofficial arrangements, by means of which people and their institutions independently pursue their causes and organise cooperation between themselves.
Governance of matters is important both in people's lives and in the activities of all of the different kinds of communities that they form. The more complex and confused the world grows, the more important governance of life and purposeful management of change become. To resist feelings of uncertainty and the marginalisation and despair that result from them, individuals, families, states and other communities must recognise changes in society and find their own survival strategies. We must be able to live amid change, learn new things and build trust between people.
Governance is a more demanding success factor in relation to our future than globalisation and new technology, because one cannot adapt to it in the same way as with globalisation, nor can it be bought or at least easily learned from others, as is to some degree the case with technology. Governance is a phenomenon that includes many levels. At the highest level, it means taking care of the central development factors relevant to the entire globe, such as sustainable development of the relationship between humankind and nature. On the level of states it is more closely bound to time and place than on the global level. Within states, on the regional and local level, it is a skill that leans heavily on its social and cultural background and is the result of a collective will.
No clear practices to be followed have emerged for global-level governance. Nation-states cling to their sovereignty. Various ideas about creating a world government have been put forward from time to time, but they have not gained sufficient support. At the moment, the procedures of governance are best and most effectively organised on the levels of states and families, which represent the extremes of large- and small-scale administration.
Since the collapse of real socialism and the end of the Cold War, the players in world politics and the ground rules of governance have partially changed. The economic sector and globally-operating large companies have acquired a completely new position. They do not constitute a coherent organisation nor even a network, but a certain kind of value community is built around them. This value community represents, in the final analysis, economic values. Owing to the dominant power position of the economy, other values have been left in the background.
With the value of the market economy dominating, it is actually within the economic sector itself that consciousness of a need to ponder moral and ethical responsibility for the development of the world has awakened. Some corporate executives have realised that large companies cannot because of their dominant position thrust responsibility for the environment, poverty and unemployment onto others. An example of this new acceptance of responsibility by the economic sector is the World Business Academy, the governing body of which contains representatives of industry, business and the academic world. The organisation publishes a journal entitled Perspectives. George Soros has published an extensive series of articles in newspapers, including a Swedish one, in which he predicts capitalism will destroy itself unless it takes account of democracy and values other than merely those internal to the economy.
When governance of change is examined from the highest to the lowest decision-maker and player, group of people and citizen, the significance of learning must be emphasised. The practices of governance must be learnt over and over again and knowledge and skills transferred to the next generation. Examples of a lack of governance are, on the family level, young couples (called the new helpless), who do not know how to boil potatoes, but also 50-year-old men who have been operating complicated machinery all their lives, but claim to be unable to switch on a computer at work without a secretary's assistance, or housewives who are versatile in the use of food processors, but seem unable to get a videorecorder switched on. An example of a lack of governance on the macro administrative level is the paralysis to the point of inaction that the EU and nation-states demonstrated when war erupted in Bosnia in the heart of Europe.
2.2 Rapid change in fundamental premises makes the future difficult to predict
The starting point in governance of the development of society is knowledge of the state of the Finnish economy and society and of the development trends that they are following, in addition to an assessment of the equivalent phenomena in the international system that influence the situation and development in Finland. The various alternatives for the future must be raked over extensively. A reality that globalisation has brought into sharp focus is that states must divert their gaze from the present to the future and develop a better ability to assess the long-term impacts of decisions. This has long been the everyday reality of companies operating in open markets.
The onward march of globalisation and the rapid breakthrough of new technology are being reflected in society, in all of its sectors and on every level. It is no longer a special matter for futurologists.
Predicting the future, also forecasting economic and political developments in Europe, is becoming more difficult as many of the assumptions, also central ones, concerning the economy and society, have to be abandoned. In place of permanence has come constant change. New assumptions on which activities are based become outmoded within a few years. There is an inability to react to change early enough. Countries that enjoy strong economic growth and prosperity can be quickly plunged into a downward spiral of recession, states can fall into debt, banking collapse, companies' competitiveness weaken and people's standard of living fall. Environmental catastrophes, uncontrolled migration, internal disintegration of societies, violence, nationalism, international crime and epidemics are confronting societies with unpredictable problems. And all that in quite a short time. In earlier times, the cause of sudden major changes was always war, rebellion or some other profound upheaval in the power system. Now the causes are often economic and everyday in character, for which reason they are not so easy to notice. As long ago as the 1970s, the Oil Crisis was one of the earliest harbingers of this kind of change.
Europe and Finland have been regarded as regions of stable social development. Yet the banking crisis in the early 1990s, the financial difficulties of the public sector and high, structural unemployment came like thieves in the night. Similar phenomena are today everyday realities in many European countries, also large ones, that had strong economies (e.g. Germany and France). Fortunately, the safety nets that the Nordic welfare society provides cushioned the effects of the recession on the everyday lives of citizens. Finding and implementing functioning structural solutions is a difficult task.
Forecasting economic development is an uncertain art. The effect of economic growth on job-creation has come in for strong criticism. Our structural unemployment is at such a high level that economic growth on its own will not be enough to eliminate the unemployment problem. Also other measures will be needed and the content of economic growth must be focused so that it supports employment.
In Finland, the inadequacy of economic growth as a means of solving unemployment can be clearly seen. Our economic growth rate is close to the head of the European league table, but our unemployment figure is likewise one of the highest. The possibilities available to a national government to remedy unemployment through the means that national economic policies provide are losing their credibility. A good example is the Pekkanen working party appointed by President Ahtisaari. At that time, the belief in most quarters was that growth would solve the unemployment problem. The only uncertainty related to the amount of growth. It has taken only a few years for confidence in this assumption to disappear. The same makers and interpreters of economic forecasts who saw economic growth as the solution only a couple of years ago now point to what they see as a self-evident fact: that the economic growth of 4-5% forecast for 1997 will have hardly any impact at all on mass-unemployment.
A belief that has been firmly held in Finland throughout the 20th century is that economic and social development features a succession of recessions and booms, and that each boom redresses the damage that the preceding recession has caused. Hardly any reforms of structures have been effected. Politically, the importance of structural reforms is recognised, but carrying them out is difficult. Opinions differ on what kinds of structural reforms are needed. In the light of many economic indicators, the recession of the 1990s gave way to an upswing already over a year ago. The GDP reached its highest-ever level in 1996. Industrial output is high compared with the EU and OECD countries. Yet half a million people are without work and the State's financial problems remain unresolved. In the background are the structural problems of economic activity and of society as a whole.
(Kuvio)
INDUSTRIAL OUTPUT
1990=100
Finland
OECD
OECD
Europe
Figures seasonally adjusted
The assessment is that the unemployment problem may not be solved until the large age-cohorts born in the post-war "baby boom" years retire. That way of thinking merely changes the label that has been applied to the problem. A dwindling active population will have to take care of financing pensions. At the same time, however, Finland will have to be an enticing country for companies to locate in, Finnish companies will have to be competitive, export earnings will have to be at an adequate level and in general society will have to be on the road to progress and innovative.
Examples show that when the laws that have been traditionally assumed to guide affairs have lost their validity, they must be openly questioned and new ways forward looked for. Some European countries have been actively seeking new means. A difficult and complex fundamental question is to what extent lowering unemployment is a matter that is within the ability of the state to take care of. An answer must be found to the question of how to manage the unemployment problem in this new situation. How can the human resources of retiring people be brought into active use?
Assessment of the fundamental assumptions on which economic and social actions are based and questioning them will require new methods and procedures also in politics and running the state. At regular intervals, we must review the lines that actions should follow and ask what is to be done and whether what is being done now is essential. We must take a stance on the tasks of the state and put them in order of priority. The idea is the same as what some countries meant in the 1970s when they adopted zero-budgeting. For there to be room and resources for new actions that strengthen the success factors of the future, something of the old that is of lesser importance will have to be given up. For that purpose, the situation will have to be set to zero from time to time.
An argument recently put forward on the basis of Britain's experience is that the welfare of societies can no longer be gauged using GDP criteria at all. Things can be going well for an economy, but badly for citizens. In the future, the welfare of nations should be measured using the concept of wealth, which is broader than gross domestic product. Wealth is the sum of those matters that citizens esteem. In addition to the economy, it includes also the social and political spheres. A nation that makes some rich but throws others out into the cold has failed in the creation of general wellbeing and wealth.
As a counterweight to GDP-based measurement of welfare, wealth- auditing methods and indicators that measure wellbeing and development have been devised. An annual wealth balance sheet takes account of not only gross domestic product, but also includes a natural resources audit, an estimate of the environmental costs that have been caused and of the state of the living habitat and an evaluation of labour use. The development and welfare indicators further reflect various dimensions even more broadly; these include income distribution, basic security of livelihood, educational level as well as life expectancy and state of health. Those indicators provide a better way of describing the real standard of living, citizens' social opportunities and the state of the nation.
2.3 Taking the helm of the future - a step ahead
Europe has been described in various horror scenarios as an old sick continent, which in clinging to its glorious past is incapable of self-renewal. A counter-argument presented is that Europe does not necessarily always have to be in the vanguard of economic growth, science and other success, because the position from which we started out is so strong. When the latter argument is presented, the comparison made is with countries and continents that are only taking the initial steps on the road to prosperity. It will take a long time before they achieve Europe's standard of living and also in those countries rapid growth will sooner or later encounter the same structural barriers as in Europe. A further counter-argument presented in the same context is that there is enough prosperity, even in times of slower growth and recession, at least over the long term, especially if one compares it with social conditions in Europe in the early years of the century or in wartime.
However, Europe is not by any means merely an adapter to international economic competition. It also has opportunities to build lasting prosperity for its citizens, succeed in international competition and solve its environmental problems.
Unless it sets itself the goal of socially and ecologically sustainable economic growth and access to knowledge, and through that reaching the vanguard of success that improves human life in other respects, Europe will presumably be making a grave mistake. Wise globalisation means assuming a pioneering role. A society of trust founded on a high level of prosperity on the part of its citizens together with constantly developing education and culture will be deliberately elevated to the status of competitive trumps. In ecologically sustainable production, natural resources will be used sparingly and success factors will be created by means of environmentally-friendly products founded on advanced expertise. Constant reform will be supported by changing the structures of the economy, for example shifting the emphasis in taxation from work to consumption of natural resources. That will also support job-creation. That is the way that long-term real competitiveness will be created. It will be possible for Europe to enjoy lasting success in the global economy whilst at the same time innovatively reforming the structures of the economy.
Economic growth, expertise, innovation and other success factors are accumulating more strongly than in the past. Exploitation of some invention or other, taking over an entire sector of industry, creating a top-level unit in science or founding a modern city with all of its infrastructure does not take nearly as much time as a few decades ago. Global markets facilitate large-scale production, profits and capital for new investment. In a decade of growth at 5-10% per annum, the Asian Tigers achieved nearly the same level of wealth as many European countries had done in a century. The present and the future differ from the past in that the borders are open for world trade and consequently Europe now has a greater responsibility for influencing the shape of the ground rules under which that trade takes place. Opportunities to do so are likewise greater.
In the knowledge society, time and place no longer impede interaction and cooperation between people to the extent that they did in the past, nor do they prevent the decentralisation of research and development to many parts of the world. Manufacturing can be located wherever it is most advantageous to do so. Research and development can be done wherever it is likely to receive the inputs most conducive to creating products that will enjoy success in the future.
There is also a substantial difference between Europe and the rest of the world in the demographic sense. The populations of competitor countries and regions are young and several times bigger. This aspect has obvious effects on economic life, production and markets as well as on the innovation base.
The world has become one big marketplace for not only goods, but also expertise and innovations. Researchers into corporate management speak of modern legal industrial espionage when they describe efficient acquisition of new know-how. The companies at the top must always stay a step ahead of the others. With the speed at which new products emerge having increased, products and expertise become obsolete earlier than in the past. Lagging or falling behind are also cumulative in their effects. If a region, country or continent does not offer good training of a high standard or if its technology is outdated, investors will not consider it an attractive location for production or design operations. As investment dwindles, other players in the economic, financial, production or research sectors likewise gradually lose interest.
Globalised companies have become detached from homelands. They do not feel bound to any national common good. They disperse their operations to different countries. Production is decentralised in the most advantageous manner from the perspective of profitability. Product development is conducted in strong centres of expertise in various parts of the world. Possible new profits and penetration into new sectors and markets are the factors that determine locational decisions.
To prevent the problems stemming from a globalised economy, there have been demands for minimum social and environmental obligations and for guidance mechanisms by means of which ethically and ecologically responsible corporate activities can be promoted.
Successful companies have adopted a clearly more future-oriented way of thinking. Even a company that is at the top in its sector can not afford to rest on its laurels for even a moment. It must, on the one hand, estimate future markets and anticipate technological development and, on the other, predict people's new needs, life values and consumption habits. Product development must be a step ahead of the competitors, but that is not enough: a new product has to be on sale before the others. Through Nokia we in Finland have seen how this thinking model functions globally in a company that is the leader in its sector. The company's own operations are constantly developed by means of bench-marking, i.e. analytically comparing them with the best in their sector. Achieving a position of leadership is emphasised in the strategy. That could be described as a broader phenomenon in economic life with respect to taking the helm of the future.
On the global level, companies base their success on an unrelenting endeavour to be the trail-blazers, market conquerors and front-runners in know-how. The same spirit of constant competition is spreading to states, universities and research institutions, art and ideologies.
To a certain degree, state finances and the rest of society must function along parallel lines. Companies do not operate in a vacuum. On the one hand, in the background to successful companies are a high level of development in other areas of expertise with a bearing on their products or sectors and, among other things, a well-functioning political system. On the other hand, the ability of a society to function well does not remain strong alone through success on the part of companies.
From the political perspective, probably the most important area of application - and at the same time the most difficult question - in the thinking model in relation to grasping control of the future and continuing competition concerns the European welfare state. It has been suspected that the state may be safeguarding the life of the citizen, with all its attendant risks, too strongly. How extensively the state, rather than individuals, should bear responsibility for illness, ageing, loss of employment, divorce, bankruptcy, misinvestment of capital or other situations that mean difficulties for people has begun to be pondered in a new way.
This risk-free future thinking model manifests itself in demands relating to "achieved rights". The argument put forward is that making the security cover provided by society excessively comprehensive unjustifiably feeds the belief that people need not strive for the best possible result in their work, studies, looking after their families, bringing up their children or developing themselves. It is enough to make a moderate effort. In the educational system for example, that model of thinking would imply abandoning the practice of evaluating students and ranking them in order of merit.
On the level of the state and the EU, a model of thinking fixated on the achievements of the past channels resources into solving the problems of today in order to satisfy the needs that people have today. Thus, in industrial policy for example, old sectors of production in which Europe is no longer competitive are artificially supported. The sectors of the future remain undeveloped, because there are not enough resources to devote to them.
However, a change in thinking has begun in many respects and a new way of predicting the future has become an everyday reality in both working life and education. Lifelong learning is part of this change. A point that has begun to be emphasised is that training in one occupation is not enough. Even employees in good occupations and with jobs that are permanent in character must constantly acquire new knowledge in their field. Often, not even this is enough; instead, they have to change occupation and sector, perhaps even several times. The future is taken in hand, preparation is made for it and the premise that it is society that bears the risks is not adopted.
In the business world, learning new things and skills and embracing new work methods are already a recognised success factor. More and more clearly, good companies are changing their business cultures and devoting resources to purposeful personnel development. One of the hallmarks of a learning organisation is awareness of its own value base. A clear and open definition of values is the foundation on which both individuals and communities base their actions in learning, creating new things and thereby strengthening competitiveness.
Europe can make a grave mistake by setting its goals too low in economic or any other kind of competition. It could also have fateful consequences to participate uncritically in global competition that spans all spheres of life. According to some predictions, the whole globe will be destroyed because it cannot stand the wear caused by economic growth. In drawing up a policy for sustainable development, we shall more or less have to call into question the whole ideology that is based on growth and competition as well as the present way of life in the market economy. From the human perspective, the model is seen to lead to an inhumane life and growing inequality.
Taking the helm of the future and striving for the best results and the position of pioneer are a neutral success factor. Its content has not been defined in advance and in principle it can be freely focused. However, the reality is that goals other than economic growth and the prosperity that comes with it are in an underdog role. They have to struggle to defend their point of view and achieve a position for themselves among the other models.
3.1 Wisely influencing globalisation
A broad phenomenon. In the Government's report, globalisation is seen as applying to capital and financial markets, goods markets and competition strategies, technology, research and development and the acquisition of knowledge, lifestyles and consumption habits, new instruments of regulation and governance, thinking, modes of perception and awareness as well as the environment.
Globalisation as a phenomenon entered the public awareness already in the latter half of the 1980s, but it was understood more narrowly than today as something relating to the environment and changes in it. In the 1990s it has begun to mean mainly globalisation of the economy, i.e. world-wide economic competition, transnationalisation of companies, free flows of money, international markets for capital and goods and a narrowing of nation-states' economic and political self-determination. Knowledge, goods, capital, services and people move freely from one country and continent to another. Science, which in most sectors has traditionally been international, is more and more integrally linked to globalisation of the economy.
Economic globalisation affects political life in many ways. The economic boundaries between states are disappearing. Transnational corporations are rising to the level of nation-states as players and international investors can cause swings in currency exchange rates, the price and availability of capital and interest rates. The frameworks within which states operate internationally are determined at summit meetings of organisations like the UN, the WHO, the IMF, the World Bank, the OECD and the G7 group of countries. Regional organisations that have emerged on an economic basis, like the EU, NAFTA, APEC and MERCOSUR are becoming major actors in their respective parts of the world.
Globalisation is linked to a revolution in information technology that has eliminated physical boundaries, made world-wide telecommunications possible and shrunk distances. Free movement of information is affecting not only the economy and public life, but also, and decisively, the lives of citizens.
Globalisation received a new impetus in the early 1990s when the communist system collapsed. An economic and social system that operated without and even contrary to markets proved to be a utopia and incapable as an investor and distributor of resources. The failure of central economic planning has affected world politics and societies on many levels. The disappearance of the model in Europe eliminated political tensions, lowered mental barriers between individuals and nations and increased people's sense of being part of the same global community. As central planning is abandoned, more and more people are coming within the compass of markets and a market economy. Now the market economy itself is coming under pressure for change with respect to both environmental questions and the stability and social dimension of its operations.
Among the great changes accompanying globalisation are the development of new technology. Competition between companies for markets has forced them to seek means of reducing production costs. Thanks to automation, it has been able to replace expensive labour with inexpensive machines in the Western countries. Automation has been essential for companies in their efforts to preserve competitiveness. In the context of the world economy, automation of production technology has confronted governments with nearly insurmountable problems in their efforts to deal with structural unemployment.
The social effects of globalisation are still only dimly discernible. It is requiring political systems to meet considerable challenges, because governments must react and respond to external pressures more often than in the past. More and more of the matters that national governments have to decide on are determined by international agreements. Despite their active participation, governments have noticed that through their national decisions alone they can no longer to the same extent as formerly safeguard the prosperity and security of their citizens nor ensure that their companies have the prerequisites for successful operation. Nor, without cooperation and alliances, can they do so even on the international level.
States and their governments are expected to be active and conscious partners in the international system. They are supposed to defend national interests in negotiations for international agreements and in international organisations. States are expected to create a national policy for exercising influence. They have to be able to represent and defend national views in those international contexts where the real decisions are made and where the matters that will be the subject of decision-making are selected. Otherwise politics will remain in the shadow of the economy and ground rules for international markets will not be laid down.
Civic organisations, political parties, the trade-union movement and various interest groups must likewise prepare for globalisation. If the entity that one is trying to influence internationalises, the cutting edge of activities must likewise be shifted to the same level. The problem is how citizens of Europe and Finland can get their ideas incorporated in the thinking of bodies that operate on a global or EU level. Europe lacks a democratic basic structure, because parties, civic organisations, the trade-union movement and the media operate on the national level. At present, public opinion can be reliably measured only on the national level. Distances, fragmentation of matters, a lack of clarity with regard to the division of labour and language difficulties are strong impediments to a civic discourse in any context other than within states. Communications technology does not solve any more than a small part of the problems.
Advancing globalisation will also affect the position of both states and citizens in the world of the future through integration of communications. We have seen the advantages of opening up the world. We must also see that as large, globally-operating communications companies capture markets and merge with each other, we shall be heading towards a new concentration. At its worst, we could soon be in a situation where there are hundreds of television channels and they are accessible to everyone, but programme production is in the hands of a few large media companies. Volumes of information too great for the human mind to comprehend flow along the information superhighway via the Internet, but news or the agenda and focus of the social discourse are determined by a very small number of media-sector players and influence-wielders. Europe is being left in the shadow of the USA in this sector. Most of the world's television programmes, movies and news come from the USA, which also controls the satellites through which information is relayed.
Globalisation is changing many of the structures of solidarity. Large companies that operate globally do not regard combatting poverty as one of their fundamental tasks. Despite the situation of competition that exists between them, the top executives of large companies find that their minds meet in many matters relating to society. To a degree, they share the same values.
Changes in solidarity are reflected also on the level of workers. Employees of large companies that operate globally and base their operations on the use of information technology find those with which they wish to identify within their own circles. Greater solidarity is felt for persons working within one's own company or for others in similar tasks within the same sector than for other people in one's own country. In the third millennium, persons working on the information superhighway in the silicon valleys of Europe will regard their counterparts in similar places in the USA and Japan more genuinely as friends and comrades in destiny than other people in their own countries. A similar international solidarity has been observable in the past among groups like sailors, air traffic controllers or researchers.
It is possible that the traditional structures of solidarity will gradually crumble permanently. Homelands are fading away and fatherlands becoming blurred or acquiring new features as production becomes globally dispersed. Goods will no longer be marked "Made in Germany". Dyed-in-the-wool German products like Mercedes cars will more and more clearly bear the label "Made by Mercedes Benz". There will be many reasons for the change. Daimler's cars will not only be produced also on other continents, but will likewise to an increasing degree be designed elsewhere than in Germany. A product marque will be an important message to international financiers, the managers of factories located around the world, workers and product designers. The images in the minds of international buyers will also be important. A buyer in Latin America will have the same desire as Europeans to identify with owners of good and expensive cars, but not necessarily with Germans. Different images will be associated with a Mercedes or Volkswagen car made in South America than with one made in Germany. It will be important for South Americans that car marques represent also their countries and safeguard employment for their compatriots.
The global state. The states of Europe and their governments will have to assess their tasks from a new perspective. That does not mean merely the role of governments as international participants, but also as national managers of internationalisation and mediators of pressures from the global economy. Governments have performed that mediation task earlier, but as globalisation advances and national sovereignty crumbles the national government is becoming one level, with a new weighting, in a multi-level decision-making system. The nation-state must act on several different levels at the same time. In Finland's case, that means the global system of agreements, the European Union, Finland's geographical environs, the Baltic Sea, the regional level and the local level. Because of the new tasks, governments are no longer able to assume responsibility for all of their old ones, which took shape at a time when the state had the will and the means to handle tasks in society very extensively and in detail. Those tasks will have to be transferred either within the state to the regional level or local authorities, or completely outside the scope of the state's responsibility to civic organisations or commercial producers.
The World Bank and the OECD have in several of their reports outlined the role of the states of the future. What they predict could be summed up as being a shift towards a state that shapes ground rules for markets to observe and administration that will be expected to provide macro-economic guidance, intervene selectively, encourage a shift towards indirect production of public services and possess an ability to regulate private monopoly functions.
Globalisation is giving the state new kinds of co-ordination tasks. In a recent World Bank report on development, emphasis is placed on the tasks of the nation-state as an international player, a creator of well-functioning national markets and flourishing business activity and in supplementing the market by performing tasks that the market does not. Governments should safeguard the interests of the weak and ensure social cohesion. They should also redress the disequilibriums, such as environmental degradation and social problems, that spring from growth on the terms of the market. At their best, governments would anticipate what lay ahead and thereby prevent the drawbacks of a pure capitalist market economy.
Another new feature compared with the past is that internationalisation extends into most segments of politics. The traditional models for practising politics are losing their foundation not only in foreign policy, but also in economic and cultural policies. Internationalisation is particularly reflected in economic, educational, science and technology and environmental policies.
In endeavouring to protect their citizens' jobs and prosperity, governments have to compete for international investment and ensure that their own companies are competitive in international markets. In questions of education and training, taxation, social security, economic regulation and working life, which have traditionally been decided on at national level, new competitive trumps must be created from prosperity and an effort made internationally to promote social and ecological responsibility. That is a means of responding to the social dumping practised by some Asian and Eastern European countries.
Globalisation requires nation-states to demonstrate many forms of activity in defending their citizens' interests. They have to draft programmes of action to harmonise national and international markets. They must adopt stances on the processes and political instruments by means of which the economic and intellectual resources of different countries and regions and the prosperity of their citizens are safeguarded, in addition to proposing means of managing the national level of globalisation. They must plan how to penetrate international markets, how to ensure that the national domestic market and the labour market function well and with full effectiveness, and how to keep the national production structure healthy and competitive in the face of pressure from the international market.
The above-mentioned discourse on the tasks of the state began already in the 1980s. In those days it was the welfare state that was being talked about. The discourse in the 1990s continues that tradition, although it also contains new features. In Europe, the discourse can be regarded as partly a reaction to a narrowing of the state's tasks in the United States, the United Kingdom, New Zealand and Australia. In addition to that, the discourse also features an understanding of the important role of markets in focusing resources.
Since the mid-1990s, research data and political feedback have been available in relation to major reforms of the welfare state and administration in English-speaking countries. Representing the extreme positions in the debate are critics of big government and those who oppose cutting back the role of the state. The debate has ranged over such issues as unemployment figures and people's social security, the European state-centred regulatory model and the American market-centred model, and unemployment policy. Cutting back the role of the state in the USA and the UK has not affected the policies of several countries in Scandinavia and Continental Europe, because those countries have continued to do things in their traditional way and have maintained an extensive public sector, growing public debt notwithstanding. In the USA and the UK, the market has been given a better framework in which to operate and its ability to guide the economy has been relied on. In both of those countries, the significance of the market as a focuser of resources is greater than in Continental Europe. However, the creation of new jobs in the USA and the UK has not eliminated the difficulties that people have in gaining a livelihood.
Both models have very obvious defects. Whilst the USA has major differences between income levels, social marginalisation and a class society, Europe's problems are high unemployment, deficits in public finances and bloated administrations. Both models see Asian's arising giants as an economic challenge. The view taken in Europe is that in all probability responding to that challenge will mean reducing public expenditure and cutting social benefits, reducing tax on work, adding flexibility in the labour market and allowing wage differences to grow.
Discussion of the American, Continental European, Scandinavian or South-East Asian economic and welfare model indicates how many different levels are involved in globalisation. Everywhere, different answers are being sought to questions of economic management, people's livelihoods, democracy and economic growth. Models are compared and their functionality assessed. Although the debate is not often recognised as a global competition, it is in fact competition concerning the factors that will underpin success in the future.
Civil society. In the discourse on globalisation reference is nowadays increasingly often made to the responsibility of civil society, i.e. a society of citizens, and of voluntary organisations for handling tasks that were formerly looked after by the state. The view taken is that the state can no longer provide all of the services that it used to and that it should not regulate the details of people's lives, but rather ought to create a framework for citizens and their own associations. Researchers characterise the change that is taking place as a slow shift from state responsibility for taking care of matters to a system for which citizens and civil society are responsible.
There has also been discussion of the state's role as an activator of civil society. An extreme position is represented by the view that would deny the state all responsibility, even in activating civil society. Another position, which enjoys broad support, argues for active participation by the state during the transitional phase. Despite cutbacks in spending, a civilised state ultimately bears responsibility for ensuring that its citizens have the preconditions for a life of human dignity if people themselves are not able to secure a livelihood and receive help from no other quarter. Activating civil society could be compared to the responsibility which the state bears in arranging markets and providing the prerequisites for an advanced degree of networking in business activities.
Several causes lie in the background to activating civil society. The first is reduced public spending and the consequent limitation of the state's tasks. However, that does not eliminate those tasks; responsibility for them is transferred to others and they become different in character. It is obvious that the market will not assume anything like all of the tasks that the state used to take care of, nor can many of the tasks now handled by the state be returned to the care of families. That being the case, the voluntary organisations of a civil society are one answer to that challenge.
International models for activating a civil society and the numerous political and economic choices in their background are the subject of extensive discussion in especially the USA and the rest of the English-speaking world. Europe must adopt a stance on those models. Our continent's distinctive character and essential structural differences must be recognised in all comparisons. There might, for example, be an attempt to transfer the civil society model to Europe and Finland as a solution to the unemployment problem, without proper deliberation of all of the ramifications.
Nevertheless, the many possibilities of the civil society should not be denied. Because continuing unemployment may marginalise large groups of the population and undermine solidarity between people, civic and voluntary organisations offer a new foundation for social cohesion. They could activate people to take independent action on the basis of a highly-developed relationship of trust. The organisations draw various local and regional communities within their sphere and through the social capital and trust network that develops in that way eventually create activities that can lead to new types of jobs and livelihoods.
Globalisation's ripple effects on the democratic system call for the development of new, direct modalities of participation. Complementing representative democracy, big democracy, will be direct forms of participation, types of part-democracy or so-called small democracy, through which people's means of exercising influence will increase.
3.2 Exploiting information and technology to the full
The central observation in the knowledge society is that information and production based on knowledge and skills will be the most important prerequisite for success in the future. Natural resources no longer have the same significance as earlier. The idea is not new and natural resources have not been an essential precondition up to now, either, as the examples of Japan and Germany show. Both countries are poor in natural resources, for which reason they have built their entire economies on importing and processing raw materials and on all-round expertise.
A lack of knowledge or else the inapplicability of what knowledge did exist has destabilised entire social systems. Located as they were between East and West, the Finns probably had a better vantage point than other Europeans to see that one of the reasons for the collapse of the communist system was technological and scientific backwardness and barriers to the flow of information. Through high-level and comprehensive cooperation agreements, Finnish circles had access to information about the Soviet Union's technological and scientific capabilities, but the real development was different. The USA, Europe and Asia under Japan's leadership were already in the 1980s on a different level of knowledge that the Soviet Union, which had invested its resources in space and military technology.
New information technology has permeated production and working life. Everyone in employment has found that information technology is needed in even the simplest job tasks. The technological upheaval has affected the everyday lives of citizens. To collect their wages from the bank or fill their petrol tank they need automatic machines and cards. Public phones no longer work with coins. Smart cards are making their advent in trains and buses. If people want to be able to pay their bills without bother or get tickets for a concert or the theatre, they must learn to use computers. Especially in countries where the cost of labour is high, personal service is becoming increasingly rare.
Examined on its macro level, the knowledge society is founded on scientific research, applied research and product development. It has been described as an innovation system, the functionality of which determines the development of the economy. The components of the innovation system are the educational system, research and product development. Europe has traditionally been good in scientific research. The USA has been the most innovative. Companies there have been efficient at applying the results of science and new technology. Japan, in turn, has been in the front rank of exploiting technology in the development of products.
Finland is among the world's leading countries in terms of applying technology and automation. We are among the leaders in developing and applying information and telecommunications technology. We are a leading country in many sectors of automation, but also in teaching and learning technologies. In international fora we have been mentioned as number one in, for example, density of mobile phones and Internet use. From the perspective of the future, that is a good starting point. There do not appear to be any obstacles of attitude to the advance of automation that is inescapable and enhances the efficiency of production nor to increasing use of information technology. The Finns were early to recognise the benefits of information technology also on the level of everyday life. Rather than expending energy in opposing change we have concentrated on getting all the advantages we can from new knowledge and technology.
A feature in the advance of technology that has been given less attention is the fact that although new technology has undeniably brought large numbers of new jobs, it has also done away with old ones in its automation aspect. The traveller on the move in Central Europe may immediately notice a difference between Finland and, for example, France, Germany, Spain and Italy. Central institutions that serve large numbers of people, such as shops, banks, service stations, railways, post offices and hospitals, are not automated. They still have high staffing levels in comparison with Finland and the other Nordic countries. The same applies throughout the broad field of public administration. Europe has nearly 20 million people officially registered as unemployed. The unemployment figures would be even gloomier if in the large European countries automation had advanced not only in industry, but also in the service sector and public administration as rapidly and as profoundly as in Finland.
If the assumption that in most of Europe new technology has not yet been availed of in the rationalisation of production, services and administration is correct, Europe will have to be able to deal with its strongly growing structural unemployment rapidly and effectively. Jeremy Rifkin (The End of Work, 1995) argues that only 5% of companies in the Western countries use new technology, but when the percentage that use it rises in the near future, 80% of former industrial workers will drop out of the labour market. He believes that information technology will make more than a third of office jobs redundant. Even if the prediction seems to be only partially true, the future problems of work will have to be brought closer to the centre of the decision-making focus than they currently are.
Knowledge is often associated too one-sidedly with technology. However, there should also be a strong linkage between using knowledge and political decision-making. Do we base our decisions on facts and scientifically-founded assessments of effect? Do we choose the best-possible alternative from the range proposed by experts or, when we choose other than the best, are we at least aware, of what we are choosing and on what grounds?
3.3 The human aspect in innovation
In coping with this period of upheaval and transition and availing of the opportunities that it offers, a feature that assumes decisive importance is humanity, comprehending human resources and using them on an extensive scale.
The Committee for the Future would like to see the meaning of innovation in everyday language expanded into a broader concept. Innovation would then mean not only technological applications, but all of the resourcefulness, creativity and capacity for renewal that one finds in human life. Innovation can be the development of free health care or reform of the comprehensive school system, feats that were accomplished long ago.
Innovation has a key position in coping with change and exploiting opportunities. It contains the development of new ways of thinking, the creation of new ways of doing things, experimenting with them, accepting them and using them in human and social activities.
The creativity of individuals is interlinked with the world of values of people. Creativity is most fruitful at producing innovations when it is founded on humanity, ethically and morally tenable values and all-round education.
Creativity on its own is not enough for innovations. People and communities can be creative, but new inventions, ideas and thoughts do not necessarily lead to innovations. Innovative persons or communities are able to make effective use of their own and others' ideas and convert them into functioning innovations. The more open the world is, the more freely new ideas are at everyone's disposal. The rapid economic rise of the Asian countries has been regarded as being based on an ability to embrace new matters and avail of inventions and in general knowledge from more developed parts of the world. Japan is at its most typical a resources-poor country that imports raw materials, machines and know-how and then processes them into export products and new expertise. The processing stage increase the value of the product many-fold.
Innovation is difficult to define and its manifestation difficult to assess, but it can be assumed that a capacity for renewal has been and is an important property in the success of human communities. It has been regarded as one factor in the rise and fall of entire nations and civilisations. Futurologists regard people's thinking and ability as an important factor of production. That being the case, innovation as the practical implementation of inventions, new ideas and methods becomes even more decisive than it earlier was.
The European Union has published the results of an extensive study in which, using many different indicators, various countries are compared with respect to their technological competence and how well this is expressed in products being launched on the market. It emerged that in most sectors European technology was just as good or better than in the USA and Japan, but Europe, being divided into several nation-states, was clearly in a weaker position than its competitors when it came to translating technological expertise into business operations.
Innovation is often one-sidedly understood as meaning, on the one hand, technology and inventions and, on the other, the ability of top individuals. Innovation often expresses itself as new models of thinking and methods of action, but here too it is essential that change is converted into practice. What can also be involved is a return via error to the old, which has turned out to be better than the new after all. Governance is a fundamental prerequisite also in innovation.
A capacity for innovation becomes the art of survival for a society in a period of upheaval or rapid change. Since innovation is not rooted in natural resources or other material aspects, but instead mainly in people's thinking, work and efforts, it is possible in all societies and on all levels of people's lives. The preconditions for carrying through social innovations that benefit the whole of society include, in addition to the thinking and work of individuals, also sustained and hard work on the part of society. The emergence of social innovations like the system of cost-free health care developed in Canada or uniform comprehensive education for all, as developed in the Nordic countries, is particularly demanding because of the many ramifications of innovations of this kind. The deeper into a society an innovation penetrates, the more important is its constant development. That is because a typical feature of innovation is that its positive effects can weaken and even become negative and gradually a burden.
In many European countries cost-free health care is regarded as a particularly successful social innovation. In opinion polls everywhere it gains the absolute support of citizens. However, the system needs further development, Medical treatment is too late a stage from the perspective of promoting public health. Preventive health care is a more efficient means. Lifestyle, hygiene and social factors have a decisive role. The North Karelia Project is an example of the new approach. One of its achievements was a 75% reduction in the number of male deaths from heart disease in the region, which was achieved by means of measures that included enlightening the public about living habits.
In a learning and innovative society, the questions "why?" and "why not another way?" are continually asked. Decisions must be justified. Logicality is in vogue. Social taboos must not exist. If, for example, one sets about dismantling state assistance for the unemployed, all of the subsidies provided by society should be critically assessed at the same time. It would have to be asked, for example, why only unemployment benefits are in the centre of the focus of cuts in state spending, which amounts to blaming the unemployed. Why not blame operagoers, who are subsidised by the taxpayer? It has been said for decades in Finland that farmers live on state subsidies and that entrepreneurs are supported to a lesser degree. What is not said, however, is where the funds are directed, and how. We resent it if someone living on social security or a refugee is treated to some small pleasure in life out of the public purse. By contrast, we take it for granted than in an affluent part of the city the local authority sees to a park's beauty by changing the flowers in the beds there three times in the course of the summer.
A society does not acquire a greater capacity for innovation merely through individuals; indeed, it is obvious that in the future outstanding talents will enjoy even greater esteem in specifically science and technology. Besides the innovative individuals, there will also have to be a high degree of collective innovation, which should be expressed on the level of, for example, laws, government programmes and budgets as decision documents.
Besides people's workplaces, an important part of collective innovation is generated within homes and families and in the contexts of organisations and hobby pursuits. Unemployment and a sharp reduction in the number of permanent jobs are leading to a situation in which it would be necessary to strengthen the innovation basis beyond the sphere of gainful employment. Passivity will increase if growing numbers of people lack a home district; in other words, if their home is mainly just a place to sleep. Residential areas must have natural and meaningful community activities based on social politics, sport, music, religion, local heritage work, environmental protection and other aspects of the common good. A decline in family size, both parents going out to work and frequent changes of address reduce interaction between people on the basis of sharing a residential community and leisure interests and in that way erode opportunities for collective innovation.
Individual and community innovation needs a favourable growth substrate. Governments, schools, work communities and other central institutions in society must support the emergence of an atmosphere conducive to creativity and innovation. Innovation in society will not be increased by means of laws, commands, prohibitions or directions from above. Just as it is difficult to imagine creativity without the joy of succeeding, innovation must receive both immaterial and material recognition.
In order to promote innovation, society must create the economic, legal, educational and social structures appropriate for each particular time and by means of which 1) the prerequisites for innovation on the part of people are ensured, 2) the nation and companies are encouraged to be competitive, at the same time preserving the natural environment and other factors of vital importance for the future, and 3) prosperity is given to as many people as possible.
People must be encouraged to develop themselves and to understand the importance of maintaining their levels of knowledge and skill. Just as important is the maintenance of values, thinking patterns and action models that one associates with a good society: trust, honesty, a sense of common responsibility, loyalty and caring for others. A society that lacks openness, joy and enthusiasm does not support innovation. Knowledge, skill, enterprise and success - a rise in productivity in economic terms - must receive a sufficiently enticing reward on both the level of individuals and of their communities, but taking gender differences and tensions into account.
Society has many means of increasing innovation, but important among them are good basic education, university training and research. A difference often noticed between Europe and the USA is that in the former universities are seen as having more the role of ensuring historical continuity and cherishing European culture and the humanities than of acting as engines of the economy. In several countries, professors avoid commercial activities in their work, seeing it as tending to narrow scientific premises. In the USA, by contrast, part of the education and research work of universities is linked in many ways to production and business. The idea begins with university financing, in which the business sector is strongly involved. To put the matter in simple terms, universities produce the ideas that the business sector, through a variety of interaction channels, converts via innovation into production, jobs and thereby wealth.
With globalisation and information technology, openness in society has become a sub-factor in innovation in a whole new way. Besides overcoming material barriers, societies must be intellectually free so as to create fertile soil in which innovation can flourish. Open discourse, exchanges of opinion, initiative, striving, emphasising the challenging character of training and work, independent action and risk-taking are the foundation of an innovative spirit. Innovation demands a spirit that is oriented towards the future.
In describing a favourable growth substrate for innovation, it is emphasised that a society must not have taboos, things that can not be discussed. Outmoded structures, hierarchies and truths that are regarded as self-evident must always be called into question. Creating new things calls for constant questioning. The questions must also be answered.
Because innovation is largely the reception of influences from outside and fashioning them into usable ideas, models of thinking and products, society must support diversity. Small countries and remote regions must intensify their interaction in an effort to substitute for the wealth of influences that comes from greatness.
3.4 Governance of matters and of life
People in Continental Europe have traditionally been accustomed to the fact that they are governed, directed and supervised from on high. It has been assumed that the state, the church, the party, the employer the teacher, parents or anyone else in a superordinated position for one reason or another knows what is good for the nation and its people. Differentiation and individualisation as well as an emphasis on independent action by people will be characteristic features of future social and economic development.
It is unrealistic to expect individuals to accept responsibility for world-wide development when even states have difficulty finding ways of exerting influence. Nonetheless, the development described in the foregoing will transfer responsibility for so-called small-scale government to people themselves. At the same time, however, people will have to be provided with the wherewithal to assume governance of their own lives so that they are integrated with society.
Governance means an ability and opportunities for people to take care of their own lives. They must be encouraged to find the areas in which they have expertise and to take care of their abilities and skills. To be able to function successfully as parts of society and the economy, people must have an ability to learn throughout their lives. Job tasks do not remain the same for even the span of one generation. It is assumed that citizens will be more active than earlier in shaping the conditions of their own lives. Governance of one's own life is the foundation on which other abilities are supported. Families will become more important as a provider of security, as a growth substrate and place of development for skills and knowledge, and as channels of social interaction.
When companies compete for markets and success, efficient organisations and effective management of and decision-making in relation to operations are recognised as prerequisites. A good product is not enough on its own. In a good company, the knowledge and skills of every employee are availed of. The internal management system is inspiring and emphasises participation. The demands of governance do not apply only to the internal system and management described in the foregoing, but also to external relations. A company must network in many ways in its search for markets.
The demand for good governance of matters applies to all human economic and social communities both locally and nationally, to municipalities, the trade-union movement, societies and associations. All must govern their values and economies and define their tasks in a manner that ensures that core tasks are well taken care of. Nation-states and the European Union must find their values and roles. They must be able to renew themselves in a manner that ensures that whatever tasks they perform are taken care of efficiently and dependably. Power of decision must correspond to rights and obligations.
On the European level, there should be, for example, a critical examination of where the EU's centre of gravity and resources have been located over the decades. Too great a share is in legally detailed regulation, drafting directives and other regulations and guidelines and in the implementation relating to them. It has been calculated that most of those matters could be handled on the national level. Some regulation is completely superfluous and only gets in the way of society renewing itself, at the same time as questions of central significance from the perspective of people's and the environment's wellbeing still lack strong common ground rules. Agriculture's share of the EU budget and of the Union's activities in general is very great. Very heavy administrative structures are still a feature of the EU's decision-making.
Global-level political guidance and decision making must be developed on a new foundation. The idea starts from the premise that alongside the globalising economy there is a need to create political arrangements. Otherwise economics will gain hegemony. States are reluctant to abandon their sovereignty.
Global-level politics is practised all the time. It is difficult to foresee what forms it will assume in the future. It may be that networking along the same lines as among companies will take case. Already now, regional economic players like the EU, NAFTA, MERCOSUR and ASEAN are in existence and concentrate also on political questions. Those and other international associations like the UN, the OECD, the WTO and G7 are more and more clearly agreeing among themselves on ground rules for the economic sector, the principles to be followed in caring for the environment or guidelines for social care.
Naturally, the significance of governance is accentuated in conflicts and catastrophes. Europe has demanded that Asia implement democracy, freedom of expression and the right to strike. A wave of strikes and clashes between the political leadership and the trade-union movement in such an ethnically and even socially homogeneous country as South Korea shows how quickly social peace can be upset. If China, with over a billion inhabitants, is unable to keep the country's development under control, the consequences will be global. There are also numerous hotbeds of conflict in Europe.
A global example of the importance of governance and leadership is our dependence on computer systems. If for any reason telecommunications systems were to be disrupted, Europe's developed society would quite soon be in a state of chaos.
The development of society must be kept subject to good governance in time of both peace and crisis. Decision making must be clear and relations of responsibility must function in all circumstances. Above all, people must be able to have confidence in their political system.
4.1 Europe's own values - do they exist?
Europe's diversity and distinctiveness. Europe is a continent where numerous cultures and traditions have more or less co-existed for millennia. When Europe's success is evaluated as a continuing historical process, the examination can not be confined solely to economic achievements. Europe does not fit neatly into any of the GDP scales. Its wealth is a multi-level phenomenon, which includes many matters other than economic ones. Future success should also be approached from this perspective of diversity.
The foundation on which Europe's prosperity is based has always been and will remain anything but a simple matter. The importance of a modern knowledge society and of a global competitive economy should not be downplayed, but Europe has no reason to reject perspectives that are broader than the economic. Europe's wealth means Italy's palazzos, France's vineyards, Britain's small towns, Swiss Alpine chalets, Greek temples, Spain's rich language of form in both architecture and music, which for the first time blended the European and Arab cultures. Our continent's wealth also expresses itself in Germany's modern industrial buildings that glow with neatness, the skyscrapers in London's and Frankfurt's financial districts, or in Swedish homes with their kitchens equipped with advanced electronics and their living rooms with furniture made of real wood.
Wealth and prosperity are a cumulative matter. They can not be measured in terms of production volume not by any other exact criterion. They also include cultural and social capital, which is the foundation of the present and future economy and society.
Whilst preserving and availing of her multi-level and complex wealth, Europe should be able to participate in creating more of it. She should preserve her precious centuries-old heritage, but also be prepared to be always involved with the new. Europe should define the terms on which she will take part in the contest of the globalised intensive economy.
In building the future, Europe should approach success and prosperity in the light of goals broader than economic growth. European prosperity is the sum of the wealth of the people of Europe and should largely comprise the things that those people value. All citizens of Europe should feel that they have shared interests in the future success of Europe. European people must be committed to creating a shared future.
Values, economy and politics. Economic and political integration feature accentuatedly in European values and the European tradition of thinking. To paraphrase Ralf Dahrendorf, the task of social policy is to combine
1) competitiveness, i.e. a functioning economy,
2) political rights, i.e. democracy, and
3) social cohesion, i.e. a sense of affinity among citizens.
That can be characterised also as a European conception of equality in a broad sense. In the opinion of several commentators, it is just for this reason that the task set for European politics is nearly impossible.
The French Revolution proclaimed equality and fraternity. Adam Smith's classical tenets of liberalism are founded on the premise that a good, functioning and enduring economy can not be built solely on the basis of individuals, their interests and profits. There must be harmony between what is private and what belongs in the realm of the community. As Germany was making the transition from a constellation of minor states to a single large one, Bismarck emphasised the tasks of the social state. It can be assumed that the Europeans will not abandon this pillar of their identity - perhaps the most important of them all, but at the same time the most difficult to maintain. Thus it must also be part of the value foundation on the EU level.
Social cohesion can be defined as a moral bond between different groups of the population. There is a reluctance in European society to sever this moral bond, because when marginalised groups of the population find themselves in a desperate situation, their instinct for self-preservation overcomes moral inhibitions. The view is also taken that it would be deceiving oneself to believe that being well-off would be enough to be secure in a society where some citizens fear for the fate of themselves and their children.
Europe's values, which emphasise democracy and equality, manifest themselves as a difficulty in ensuring a good economy on the terms of the prevailing doctrinal structure. The same difficulty is inherent in the EU's attempt to deepen economic integration and expand into eastern Europe. The definition of a what a good economy must be in order to qualify for economic and monetary union (EMU) has attracted criticism for the same reason.
The European values that emphasise social cohesion are also in the background of the difficulties in the way of strengthening and enlarging the Union. Europeans will not give their unreserved support for a strong EU as long as it is only a monetary-, financial- and economic-policy project. Support for and the acceptability of the EU has increased whenever something has been agreed on security and defence, EU citizenship, regional benefits and drawbacks, common labour and social policies, environmental protection and the need to create common standards for foodstsuffs quality and purity and the ethics governing their production. European economic and political integration, the ultimate outcome of which is forecast to be political union, is a unique process, and therefore has nothing with which it can be compared. Partly due precisely to this social starting point, several American economic experts believe European integration will fail, because it is confused and aspires to contradictory goals.
Often presented as European values are, on the one hand, such ethical-moral virtues as humanity, solidarity, democracy and striving for peace and, on the other hand, juridical constructs like human rights and fundamental rights. Further matters that there is an eagerness to emphasise are historical traditions, humanism and an old cultural foundation - especially when the intention is to make a comparison with the New World. Those are undeniably values that can be attributed to Europe, but it has to be asked whether the same features can not be identified in other continents. Asia is built on a cultural and educational heritage older than Europe's, and a strong family institution is most obviously a wellspring of solidarity in Asia to this very day. Europeans like to emphasise the fundamental rights that derive from the legal basis that they have created, but forget too easily that those rights have often remained no more than theory.
4.2 Basic features of the European welfare model
Social and cultural differences within Europe seem small. Economic differences become obvious when the EU countries are compared with Eastern Europe. Cultural and social values change as one moves from East to West or from North to South. If the USA, Asia or Africa is chosen as the object of comparison, the content of Europeanness gains clarity and uniformity. Europeanness is based on its own multicultural values, traditions, religious doctrines, culture and conception of the human being.
It has been noticed in the EU that focusing attention only on a common market, currency and economy is not enough, but that people's social and cultural foundation must also be strengthened. That heads of states, governments and other elites recognise the common interests of Europe and reach agreement to promote them is a good beginning. Getting citizens involved will require more. The effects of integration on everyday life should be made visible. People have a conception of European values and of what is a good European life. They should have goals and ideals in pursuit of which they will develop their own continent.
Definition of the European social model creates a foundation for a common identity. Emphasising the Europeans' life values, view of the world and identity unites, but it also has its dangers. Presenting one's own state model as being better than others easily feeds nationalistic ideas. Nationalism was earlier recognised as a foundation for national enmity. Now the same mechanism for excluding "others" - strangers, threateners and enemies - is possible in the integration of economic and military areas or even whole continents. It is just that nowadays the areas to be defended are more extensive than nation-states and include several peoples.
A feature that can be attributed to European society is a need to oppose collective poverty and marginalisation of large population groups. Social differences between individuals can not be avoided, but deep structural differences can be prevented from coming into being. Social peace is respected in the European model also in this respect.
The model that emphasises structural sociality has been regarded as preventing, on the one hand, differentiation of wealthy people on the basis of work, place of residence or other aspect of their lives and, on the other, the gradual marginalisation of the poorest until they are completely excluded from society. The model that emphasises social equality also has the purpose of preventing violence and avoiding the need for society to have to prepare to deal with it. In Europe, building walls around residential areas, armed guards or the use of bomb- and weapons-detection devices at workplaces or schools are still unusual.
Although unemployment is at a record high level (20% adult, 40-50% youth), European society has remained relatively peaceful. Credit for that has been attributed to Europe's even social structure.
Unemployment has remained at a high level in Finland for a long time. In the beginning, a relatively good and comprehensive social security system helped people get by. Now that unemployment has persisted for a longer time, however, a division of people into two distinct groups is beginning to show itself in society. Cuts in social income transfers have in part been focused on the same families and this has made their economic adjustment more difficult. However, one can believe that Finnish society is socially and culturally on such a high level that economic recession and high unemployment have not completely disrupted people's quality of life and identity.
Fear of revolt on the part of the unemployed and deprived is probably not what lies at the heart of the matter, but rather the question of how long those in employment will be willing to pay for income levelling and growing public expenditure. How long will solidarity between different population groups, countries and regions last in Europe? In France, the tax-paying lower middle class supports the National Front and Le Pen. In Italy, the wealthy north has for years wanted to break away from the poor south and the middle-class Rome region, which it sees as living on tax funds and doing unproductive bureaucratic work. Will Germany remain willing to contribute such a large share of EU funding as now?
When the concept of work is broadened beyond paid employment to include also activities that are productive socially and from the perspective of the individual, public opinion no longer regards permanent mass-unemployment as a major problem. GDP is growing and many economic indicators look positive. Yet it is questionable whether Europe can stand such a large number of people remaining outside paid unemployment. It wastes large quantities of human resources, although global competition would require every possible reserve to be efficiently used. If Europe compares its own level of prosperity with its past, everything looks better. The same applies if we compare the situation in Europe with that in Africa or remember that in the background of China's economic rise are millions of poor and even starving people. Europe's relative situation seems good, but in global competition we must take notice of the burgeoning American economy and the Asian Tigers. The challenge of the future has many dimensions.
4.3 General and common good the foundation
European political thinking emphasises that the task of politics is to implement the public and common good. The contents of that concept and the emphases in it have varied over the centuries. During the French Revolution towards the end of the 18th century there was talk of citizens' political rights, freedom of expression and personal inviolability. At the same time, further east in the heart of Europe serfdom was only just being left behind. In Bismarck's Germany, the common good was anchored in security and order as well as in work and social care.
Europe's numerous petty political entities merged into bigger and bigger unitary states around the turn of the century. Around the same time the German sociologist Max Weber described the state as the champion and distributor of the common good. The core of the common good was built around the state and the prosperity that had been built up under its leadership. The starting point commonly adopted since the second world war has been that the broader the state, the broader the prosperity. The UK as part of the English-speaking world (USA, Australia and New Zealand) has in recent years adopted a more scaled-down state model.
Only towards the end of the 20th century has the definition of the public and common good acquired new features. The entire Weberian thought construct, in accordance with which the state is above everything and oversees the common good through a monopoly on physical means of coercion, was based on a conception of a good life in the here and now, of the security to be given to the citizens living at this time. Gradually, concern for the lives and wellbeing of future generations has begun to be felt in various spheres of life. The concept of the public and common good has been chronologically broadened. Values, moral and ethical points of departure have settled into a new context when this question has been asked: What is good for future generations and can what is good for today's people be bad for future generations? Questioning began in relation to nature and raw materials, but has broadened to encompass consumption and living habits.
At the same time in the Nordic countries, where today's citizens' welfare state has developed furthest, systems that took decades to build up have had to be scaled back owing to the public sector's financial difficulties. The sector's financial base weakened rapidly in Finland and public services had to be cut comparatively quickly. Sweden has had to take similar action, albeit later and more slowly. Norway's oil sector and self-sufficiency in other respects have enabled that country to cope with public-sector financial crises without problems. In the latter half of the 1990s, the rest of Europe is following similar lines, and the strict criteria that public finances will have to meet for admission to EMU are further accelerating the development.
The goals of the public and common good and means of achieving them are part of the European debate. In recent times, the "slim and efficient state" has been presented as a social goal. What is meant here is that the state continually defines its tasks and selects the core tasks of society as well as any sectors in which the state's participation is necessary. Core tasks are those that no other instance takes care of. It is in these that the public and common good has the greatest interest. The state's core tasks are financed using tax revenues and through annual budgets. All other public tasks within the compass of collective regulation can when necessary be transferred to the public sector or entrusted to the care of the so-called third sector, i.e. not-for-profit community associations.
An essential element in thinking on the state's new role and tasks in the beginning of the third millennium is first of all separation of the core state and its permanent tasks from the other tasks required by the situation at any given time. Secondly, the state is seen as having a different role as a decision-maker, overseer, financier, director and provider of financial or other support. The state discharges its different kinds of tasks in different ways.
The principles of good, responsible administration emphasised among core tasks are legality of decision making, publicity, legal security and in general the so-called traditional good. By contrast, when the state is functioning as, for example, a building client, a promoter of innovation or as a source of finance for some special service, it can act like a company, a research institution or a bank. In performing the state's cores tasks, the workers are civil servants with official responsibility, whereas in other tasks workers are in a situation similar to that of their counterparts in private organisations.
People are also in different positions depending on whether they are citizens and taxpayers exercising their rights and demanding from the state something to which they are entitled, or customers who can choose between public or private providers of services.
In EU circles, the tasks of nation-states have in many ways become the subject of debate. The EMU criteria have been framed in a way that requires all member states to get their government finances into shape. In practice, several states have had to effect sharp cuts in public spending and arrange their activities considerably more efficiently than hitherto.
Social security in the future and especially financing pensions for the ageing population is one of the most concrete problems that European states are having to deal with. Mainly in the UK - most recently as an aspect of opposition to EMU - the question of the state's responsibility for accumulating pension funds has been raised. British researchers have called the whole EMU project into question because neither in Germany nor in other EU countries do pension funds exist. Pensions must be accumulated. Budget deficits can not be filled.
The debate on the state's responsibility has gained momentum also in this sector of welfare as internationalisation advances. The USA and Asia have adopted quite a different way of ensuring that people can maintain a standard of living when they are old or ill. In the USA people themselves save for pensions and sickness benefits through insurance. Many Asian countries are only now planning social security systems, but it appears that Europe will not be taken as the model. The European system, which is based on each working generation paying most of the costs of supporting the sick, the old and the unemployed, is becoming the target of severe criticism in a situation where the average age of the population is increasing rapidly. It is not right to pass uncovered liabilities on to future generations. High youth unemployment (in several European countries as much as 30-40%) can be expected to increase moral anguish about the present way of sharing costs.
It is in environmental matters that the demand for the public and common good and concern for the future come together most visibly and understandably. Already since the 1970s, parallel to the rise of the Green movement, how to protect forests, clean water, seas, flora and fauna for the future and how to safeguard the original environment and natural resources so that they can be passed on to later generations have been recognised as problems in Europe. Increasingly strident demands for the preservation of some degree of natural diversity have begun to be made. The environment must not be destroyed nor natural resources overexploited in the name of any one era's or generation's prosperity. Not all shorelines nor bird nesting sites in the Mediterranean or Baltic should be used for human settlement. Continuity of flora and fauna must be safeguarded. The natural environment should be passed on to the next generation in at least as good a condition as we have received it.
In Germany, where deliberation of the state's future tasks has been the focus of systematic study in recent years, two new vital tasks comparable to the core ones have been proposed. These are: 1) forecasting the future and 2) science, technology and research. Naturally, in all states it is the leading party that determines the agenda and choices in social policy. An indication of the strength of the consensus that obtains with regard to the importance of forecasting the future and especially ensuring a capacity for innovation is that the Social Democratic Party, which has been in opposition for many years, called last autumn for the creation of an Innovation Ministry in Germany. Ministries for science, technology and research already exist at both federal and Land (state) level.
4.4 Risk-taking and -sharing becoming distorted
The new Director of the London School of Economics and Political Science, Anthony Giddens, sees the crisis of the welfare state as being a crisis of risk-taking. Too much responsibility for the risks that are part and parcel of people's lives has been transferred to the state. In his view, the positive welfare of the future will mean an active mobilisation of life's numerous decisions compared with the present passive calculation of risks.
The future is uncertain. Companies prepare for it by taking out insurance. Individuals everywhere in Europe have throughout the 20th century increasingly and more profoundly come to rely on the state to bear the risks that they face in their lives. The state is regarded as insuring its citizens for the event of illness, unemployment and old age and to varying degrees in different countries also against other risks. Some of the risks that have been transferred to the state are in principle, and already with regard to the premises underlying then, very problematic. In actual fact, the state bears responsibility also for its citizens' wrong decisions, neglect, misinvestments, self-destructive behaviour, criminal activity and indolence. On the level of society, however, an even greater danger lies in a way of thinking in which responsibility becomes blurred and motivation for enterprise and innovation vanishes. In the European critical social debate, this phenomenon is called the problem of the too-ready and too-easy society.
The transfer of risks to society can often take place imperceptibly, unintentionally, and the consequences are often not noticed from the perspective of society. Everywhere in Europe, irrespective of differences between religions, cultures and state model, divorces have increased explosively and, unlike in the past, now women are on an equal footing as initiators of divorce. An obvious cause of this is that risks associated with the family and children, in relation to supporting children, taking care of them, educating them and increasingly clearly also raising them, can be transferred to society. The downsides of this have been given less attention.
Attitudes to the sharing of responsibility between the state and the individual also vary with respect to positive matters. In international comparisons, the allowances paid to families for taking care of children at home in the Nordic countries and these countries' other support measures for families with children have been marvelled at. They have been understood in different kinds of cultures as amounting to a transfer to the state of responsibility for ensuring that children are born and the line continued. In the Nordic countries, by contrast, we are accustomed to completely opposite thinking. Children's day care that is either arranged or at least supervised by the state as well as school meals are essential preconditions for women being able to participate in working life and in general for equality. Differences have been observed between Finland and Sweden, in, for example, how easily (in the Finns' view) parents in Sweden relinquish, in the name of child protection, responsibility for looking after and bringing up their own children, doing so either under compulsion or on their own initiative.
A blurring of the dividing line in responsibility for children's future is one of the most difficult and likewise most sensitive matters. Have we in the Nordic countries transferred too much responsibility for our children's mental growth to society? From time to time at least, the number of places, class size and other material aspects have become the core issue in the debate on day care and schools, and have continued to be right up to the point of enactment of legislation. Learning, understanding and wisdom as goals have remained in the background.
4.5 Economists challenging the welfare models
Long-term structural unemployment is a merciless measure of the success of the European model of society. If Europe is unable to take care of mass-unemployment, the model's good goals and principles will not have worked in all of the most essential respects in the way that they were intended to. No organisation or action model is an end in itself; it must serve people.
The virtue of the European model of society must be assessed as a totality. For example, one publication distributed by the OECD assesses Finland and the headline of the article describes the country's public sector as "the world's best". In the light of several criteria that is so, but our high unemployment calls the whole argument into question.
Some economists have called the present European model of society into question most clearly. Ten European and American economists representing different views on society (The Financial Times' and The Economist's financial editors and eight professors) presented a nine-point programme, which they called the "Salzburg Manifesto", for solving the unemployment problem. In it, Europe's so-called "soft" approach to unemployment is rejected:
The manifesto, set forth in the book "Fighting Europe's Unemployment in the 1990s" (1996), recommends:
1. The central bank must both take care of inflation and ensure that demand does not decline.
2. Minimum wages must not be raised. There should be more local agreements and wage differentials.
3. The principle of the same pay for the same work should be abandoned. New employees should sometimes receive higher wages than older ones.
4. Wage differentials should be sufficiently large.
5. The most effective way to slow down increases in wage differentials is to channel training to suit the needs of the market.
6. Budget deficits should be eliminated in order to bring interest rates down and make investment profitable.
7. Unemployment benefits should be cut and the funds diverted to helping people in low-paid employment.
8. Pay-related unemployment benefits financed out of tax funds should be abolished.
9. The social chapters in the Maastricht Treaty are founded on justifiable social concerns, but they may weaken employment.
In the view of many economists, Europe will be able to cope with its unemployment problem only by accepting th