by Tony Judt
There was nothing especially mysterious about globalization. It wasn’t even unprecedented—the impact on the world economy of new and rapid networks of transport and communications at the end of the nineteenth century was at least as dramatic as the transformation wrought by the Internet and the deregulation and liberalization of financial markets a century later. Nor was there anything new about the unequal global distribution of the benefits of liberalized trade—particularly when, at the end of the twentieth century no less than in the years before 1914, international trade regimes were so consistently accommodating to the interests of the powerful and wealthy.
But from the European perspective the latest transformations in the world economy were distinctive in one important respect. At the end of the nineteenth century the European states were just beginning to expand their domestic reach: in time many of them would own, operate or regulate large sectors of the economy. Government expenditure—financed out of new, progressive taxes—would increase dramatically, partly to pay for wars but increasingly for the purpose of servicing social and welfare needs for which the state was now assuming responsibility.
The economic internationalization of the nineteen-nineties, however, followed closely in the wake of the first great wave of European privatizations and provided the impetus for more to come (see Chapter 17). The European state was now in retreat—first in Britain, then much of Western Europe and finally in the former-Communist East—a process further abetted by the implementation after 1987 of the Single European Act, with its provisions for open competition within and across borders. Through mergers, acquisitions and the internationalization of their operations, companies and corporations now operated on a global scale. The production and distribution of goods was often beyond the control of individual countries.
As for money, it was beginning to multiply and migrate in ways that would have been unthinkable a few years before. In 1980 the sum of all international bank lending was $324 billion a year; by 1991 that figure had grown to $7.5 trillion—a 2,000 percent increase in just over a decade. And this was just the beginning. Controls on the movement of capital—eliminated by most European states in the course of the early Eighties—now appeared as antiquated as food rationing. The ‘crash’ of September 1992—when first the UK and then Italy were forced out of the European Monetary System and obliged to devalue by private speculators and institutional investors whose activities they were powerless to prevent—was a highly symbolic moment.
The advantages of this revolution in the international economy were self-evident. Investment capital, no longer restrained by national frontiers, exchange-rate regimes or local currency regulation, flowed unchecked wherever it was needed (and could anticipate a profit)—by 1990 foreigners already held 34 percent of German debt. But there were disadvantages too: European manufacturers, their profit margins constrained by the high wages and overhead costs of employing skilled labor in Germany or France or Sweden, were now at liberty to seek out not only international investors but also a more malleable and inexpensive foreign workforce.
Instead of importing into Europe cheap workers from poor countries—as in the past—German or British or French firms now found it more efficient to export their factories instead, installing them in Brazil or Nigeria, Portugal or Romania and then directly selling the finished product to markets all over the world. This further accelerated the de-industrialization of Western Europe, adding to the already chronic unemployment in many regions—and increasing the burden on state-provided unemployment compensation and other social services.
When the last coalmine in France—at Creutzwald in the Moselle—closed in April 2004, no-one even pretended that the former miners would ever find regular work again. Unemployment in the Moselle district hovered around 10 percent of the active population; further north, in the former mining towns along the Belgian border, it was 15 percent. France as a whole had lost 1.5 million industrial jobs in the last three decades of the century, most of them since 1980. Spain, which very quickly lost any comparative advantage that accrued to it from being one of Western Europe’s more backward economies, shed 600,000 jobs in the twenty years following the transition to democracy. At the height of the recession of the mid- 1990s, 44 percent of the country’s under-25 workforce was unemployed.
Unemployment was not new. And given the generous welfare net available in most EU countries, the economic impact of joblessness on individuals and communities was in no way comparable to the devastation of the inter-war years (its psychological consequences are another matter). But what was distinctive about the social costs of economic disruption in the last years of the twentieth century was that they were taking place in a time of plenty. Privatization and the opening of the financial markets had created great wealth, albeit for a relative few; in certain places—London, say, or Barcelona—its consequences were strikingly visible. And thanks to the shrinking of distances and the increased speed of communications—via computers and the electronic media—information about the way other people lived was immediately and copiously available to all.
It was this sense of glaring contrasts between wealth and poverty, prosperity and insecurity, private affluence and public squalor, that drove a growing skepticism in Europe about the loudly touted virtues of unregulated markets and untrammeled globalization—even as many Europeans were themselves the indirect beneficiaries of the changes they deplored. In the past, such sentiments—added to pressure from organized labour and the self-interest of politicians—might have favoured a retreat to some form of limited protectionism.
But governments’ hands were now tied and organized labour, in the traditional sense, hardly existed anymore. Only in France did a unionized workforce succeed with the help of public opinion in temporarily blocking the sell-off of public companies: and even then only in special instances like Electricité de France, an icon of the post-war nationalized sector whose employees were among the few remaining members of the once-giant (Communist-led) Confédération Générale du Travail (CGT). In the last years of the century, even as the rest of the European energy market was deregulated, EdF remained in state ownership.
But the CGT, once the dominant blue-collar union in France, was a shadow of its former self—the French union movement as a whole had lost two-thirds of its members since 1980—and the workers it represented were no longer typical of the laboring population in France or elsewhere. Work itself had changed. What was emerging in many places was a novel, four-class system. At the top was the new professional stratum: metropolitan, cosmopolitan, affluent and educated—often attached to banks and other financial agencies, the primary beneficiaries of the new global economy. Then came a second tier, a protected core of traditional employees—in factories, service industries or the public sector—their jobs reasonably secure and many of their traditional benefits and guarantees still intact.
A third tier consisted of small businesses and services—corner-storekeepers, travel agents, tailors, electronic repairmen and the like—more often than not owned and staffed by immigrant communities or their descendants (Arabs in France, Turks or Kurds in Germany, South Asians in Britain). To these should be added the very sizeable and typically family-based ‘grey’ economy in Southern Europe. In Italy, where everything from shoes to textiles to machine parts was often produced and distributed below the radar of officialdom, it was estimated in 1997 that the ‘informal’ sector contributed at least one quarter of the country’s Gross Domestic Product. In Portugal the national figure—inevitably an estimate—was 22 percent; but in some regions—like the town of Braga in the far north of the country—‘unofficial’ workers constituted as much as 45 percent of the local labour force.
And then came the fourth tier—the fastest growing: people employed (if at all) in jobs that lacked both the long-term security of traditional skilled work and the benefits that had become standard in the boom years of the Fifties and Sixties. To be sure, unemployment figures in some countries—Britain, or the Nether
lands—did eventually fall to gratifyingly low levels: proof, it was widely bruited, of the virtuous workings of the unhindered and globalized market. But many of those who no longer figured on unemployment rolls—women and young people especially—were now doing low-paid, part-time work without benefits; or else were employed on fixed-term contracts in job programmes subsidized or under-written by the state.
Those whose wages were too low to support them and their families could still turn to the welfare state, and many did. In the UK, where the Thatcherite assault on state and society alike had been felt most acutely, 14 million people now lived in poverty, including 4 million children.365 One person in six depended upon Income Support or Family Credit programmes to keep them above the poverty line. Homelessness, which in northern Europe at least had been effectively eradicated by the end of the 1950s, was once again on the increase: in the course of the Thatcher years the number of homeless in London alone rose ten-fold. By the mid-’90s it had reached 80,000. Within a few miles of some of the most expensive real estate in the world parts of the British capital were beginning to resemble the ‘Outcast London’ of late-Victorian notoriety.366
Whereas, in the past, economic upswings had tended to lift many of the poor into better paid and more secure employment, this was no longer happening. Europe, in other words, was developing an under-class in the midst of plenty. As the French sociologist André Gorz had predicted back in the 1960s, the end of the industrial era would see the birth of a new caste of casual, temporary workers—a ‘non-class of non-workers’—at once marginal to modern life and yet somehow right at its heart.367
Like its American equivalent, the European under-class was determined not only by poverty and unemployment (or under-employment) but also and increasingly by race: in the mid-’90s the unemployment rate in London for young black men was 51 percent. The poor, like Europe as a whole by the end of the century, were strikingly multinational—or ‘multicultural’ as it had become custom to describe it, in acknowledgement of the fact that many dark-skinned Dutchmen or Germans or Brits were the native-born children or even grandchildren of the original Moroccan or Turkish or Pakistani immigrants. Towns like Rotterdam or Leicester were now multi-lingual and multi-colored in a way that would have amazed anyone returning after an absence of even just two decades. In 1998, white children were a minority in the local authority (i.e. public) secondary schools of inner London.
Europe’s major cities, London above all, were now truly cosmopolitan. If the high-paying city jobs were still going to white Europeans (and North Americans) nearly all the low-paying work, from street-cleaning to child-care, was now done not by traditional ‘second-class’ Europeans from the Alentejo or the Mezzogiorno but by ‘minorities’, often black or brown, many of them without working papers. According to official figures the net increase in foreigners living in London and the south-east of England in the years 1992-2002 was 700,000; but the actual number was distinctly higher.
Immigration, though perennially discouraged and rigorously controlled throughout Western Europe, was thus still a major demographic factor: of those same inner-London children of 1998, one third did not use English as their first language. These were frequently the offspring of refugees, ‘asylum-seekers’ in the jargon of the day, whose numbers had ballooned in the wake of the Yugoslav wars; but also of migrant workers from Central and South-East Asia, the Middle East and much of Africa—many of them illegal and thus undocumented.
In Germany, whose asylum facilities were (and remain) by far the most generous in Europe368 but where it was traditionally very difficult for immigrants to obtain full citizenship, it was estimated that there were five million such people—counting families and dependants—by the end of the century. The majority of asylum applications to Germany by the beginning of the new century came from Iraq, Turkey and the countries of former Yugoslavia, but there were also growing numbers from Iran, Afghanistan, Russia and Vietnam.
The fear that Western Europe might be ‘overrun’ by ‘economic refugees’, illegal immigrants, asylum-seekers and the like contributed to a widespread lack of enthusiasm for EU enlargement. Already by the 1980s undocumented workers from Poland were present in large numbers in the British and German building trades. But the problem was not so much Poland, or Hungary, or the other would-be accession states of Central Europe, but rather the lands to their east. In 1992 Poland itself had 290,000 ‘irregular’ immigrants, mostly from Bulgaria, Romania and the former USSR; Hungary, with a population of just 10 million, was home to over 100,000 asylum-seekers. Whereas life there—or in Slovakia or the Czech Republic—was hard, it was not intolerable and the gap separating these countries from their Western neighbours was already being bridged, however slowly. The gulf between Central Europe and the rest of post-Communist Europe, however, yawned far greater.
Thus whereas by the late-Nineties the average monthly wage in Poland and the Czech Republic was already approaching $400, in Belarus, Ukraine and Romania it hovered around $80; in Bulgaria at under $70; and in Moldova at just $30—itself a misleading average, since outside of the capital, Chisinau, incomes were lower still, in a population of whom 48 percent still worked on the land. And unlike Poland, or even Bulgaria, the condition of the former Soviet republics was not improving: by the year 2000, one Moldovan in two was earning less than $220 a year—just $19 a month.
In such circumstances the only hope for Moldovans—or Ukrainians, or indeed many Russians outside of the major conurbations—was to find work in the West. And so an alarming number of them—young women above all—ended up in the hands of criminal syndicates, shipped into the EU through Romania and the Balkans to be employed at best as indentured servants in workshops and restaurants, at worst and more often as prostitutes: in Germany or Italy—or even Bosnia, servicing a well-paid clientele of Western soldiers, administrators and ‘aid-workers’. Involuntary Moldovan and Ukrainian ‘guest-workers’ thus joined the Roma (Gypsies) at the bottom of the continent’s multi-cultural heap.369
The victims of the sex trade were largely invisible—like earlier generations of white migrants from Europe’s fringes they blended easily enough into the local majority, which is why they proved so hard for police and social services to trace. But most of the people whom French sociologists and critics had taken to describing as les exclus (‘the excluded’) were perfectly visible. The new under-class consisted of people excluded not so much from work as from ‘life chances’: individuals stranded outside the economic mainstream, their children poorly educated, their families marooned in barrack-like apartment blocks at the edge of cities, bereft of shops, services and transport. In 2004, a study by the French interior ministry concluded that some two million such people lived in urban ghettos blighted by social exclusion, racial discrimination and high levels of domestic violence. In some of these quartiers chauds youth unemployment had reached 50 percent; the worst affected were young people of Algerian or Moroccan descent.
All too often this under-class was distinguished not just by colour but by creed. For in addition to being multi-cultural the European Union was now increasingly multi-religious. Christians remained in the overwhelming majority, albeit non-practicing in most cases. Jews were now a small minority, their numbers significant only in Russia, France and to a much lesser extent the UK and Hungary. But Hindus and above all Muslims were now a substantial and visible presence in the UK, Belgium, the Netherlands and Germany, as well as in the main cities of Scandinavia, Italy and Central Europe. And—uniquely among the major world religions in Europe—the number of adherents to Islam was rising rapidly.
By the first years of the twenty-first century there were perhaps six million Muslims in France (the majority of North African extraction) and almost as many in Germany (chiefly of Turkish or Kurdish background). Together with the nearly two million Muslims in the UK (mostly from Pakistan and Bangladesh) and a significant presence in the Benelux countries and Italy, these figures suggested a total of perhaps fifteen million Muslims i
n the Union as a whole.
The Muslim presence in communities that were hitherto overwhelmingly secularposed difficult questions of social policy: what provision should be made for the wearing of religious clothing or symbols in public schools? How far should the state encourage (or discourage) separate cultural institutions and facilities? Was it good policy to support multi-cultural (and thus effectively separate) communities or should the authorities seek rather to facilitate and even enforce integration? Official policy in France advocated cultural integration and forbade the display of signs of faith in school; elsewhere, notably in Britain and the Netherlands, there was a broader tolerance for cultural distinction and assertive religious self-identification. But opinion everywhere was divided (see Chapter 23).
If such questions had risen rapidly to the top of national political agendas, and were increasingly entangled in debates over immigration and asylum, it was because of growing anxiety all across the continent at the rise of a new generation of xenophobic parties. Some of these parties had roots in an earlier age of sectarian or nationalist politics; others—like the surprisingly successful Dansk Folkeparti or the List Pim Fortuyn in the Netherlands—were of very recent provenance. But all of them had proven unexpectedly adept at exploiting ‘anti-immigrant’ sentiment.
Whether, like the British National Party, they railed against ‘ethnic minorities’ or, like the Front National’s Jean-Marie Le Pen, they targeted ‘immigrants’—in German the preferred term was ‘foreigners’ or ‘aliens’—the parties of the far Right found rich pickings in these years. On the one hand slower growth combined with vulnerability to global economic forces was exposing many working people to a level of economic insecurity unprecedented in living memory. On the other hand the old organs of the political Left were no longer in place to corral and mobilize that insecurity under the banner of class: it was not by chance that the Front National often got its best results in districts that had once been bastions of the French Communist Party.