CAN ECONOMIC DEVELOPMENT AND SOCIAL PROTECTION CO-EXIST?

 

   The measures for the protection of the midde and the lower socio-economic class (which constitute the majority of citizens) are the most important issues during pre-election campaigns. The question is whether the measures promised during campaign periods are realistic. The results of the most recent elections have proven that the policy of overtaxing the middle class in order to subsidise the underclass did not bring any political advantage. Radical measures and redistribution policies, like the ones imposed by totalitarian systems which collapsed in the 1990’s, were also not effective. Political leaders are searching for politically effective measures, which will impress the electorate.

It seems that almost all political parties are trying to present programs, measures and policies that fall under the term “social market economy”. Social market economy is “a free market economic system, which conforms to the laws of supply and demand, and is directly overseen by the state, so that societal groups of reduced competitiveness, such as the elderly and the unemployed, are protected.” It will be interesting to see what the electorate will decide, i.e., which political party will be able to better implement social market economy policies. The difference in the proposed policies will depend on whether a political party favours statism (“all state”) or competition (“all market”).  In this article, we will concentrate on the following 5 questions:

1) Can an inflated public sector co-exist with the notion of social market economy? Is competitiveness possible in a state with an inflated public sector? Is it possible to lower the price of products and services and at the same time have profitable businesses, which in turn will be able to employ large numbers of people and make further investments?

2) Can a small public sector with limited scope, such as defense, security, public health, institutional protection through independent authorities and compulsory education, and also stringent supervision of economic competition, bring positive economic development for the population at large?

3) Should the social protection of those societal groups unable to be competitive, such as the elderly or unemployed, be provided only when there is no “free-riding” due to tax evasion and tax avoidance?

4) We live at a time of globalisation, when the prices of products and services are determined according to the production cost. In this society, can productivity only be improved through good training, technology and entrepreneurship? Are there any other ways for balancing the imports and exports of our country, or is the increase in productivity, so that prices are competitive, the only way?

5) After the traumatic experiences of the last ten years, has the majority of the electorate finally understood that distribution policies based on borrowing funds always lead to economic impasses? have they understood that the same conditions always produce the same results, and that in future it is advisable to steer clear of “false prosperity” policies?

Maniots have in their ancestry both of these concepts: the competitive process and the social protection. Our ancestors were practising these policies for many centuries, and we, their descendants, have inherited them. The many towers of Mani provided protection from the competition between families, which often ended in warfare. However, warfare did not exclude reconciliation, especially in times of urgency or shared objectives. The protection of the economically disadvantaged, who were recognized as equal members of the small society of each village, was always one of the main objectives.

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