[small updates 9/19/2016]
I am writing a manifesto about another Greece and about another Europe. Τhe text is not complete and may have language mistakes (some corrections 12/29/16) .
The Principles and the Social Agreement
The manifesto proposes a new social agreement for the EU countries that are bankrupt, or are going bankrupt or are candidates for The Euro Zone countries:
This new social agreement should include:
2 Standard institutions of Rule of Law (Denmark level)
3 Standard Nordic welfare state model, based on institutions of flexibility and security within the labour market (Flexicurity),
The manifesto is about the integration of Europe and argues that wealthy countries have a moral obligation to offer their expertise on the inclusive political and economic institutions to any country in which the majority of citizens wish to change their institutions.
The manifesto is based on the theory of evolution of political and economic institutions by Acemoglu - Robinson, as it is developed in their book "Why Nations Fail". (1)
The manifesto suggests a slightly different hypothesis from Acemoglu – Robinson’s for the past and the future.
The manifesto suggest an eternal struggle between the inclusive and extractive institutions.
We consider it our obligation to preserve and enhance the inclusive political and economic institutions, for the next generations.
The manifesto is to be seen as our contribution to this obligation.
The manifesto suggest a change in ALDE's Stuttgart declaration, which should describe our world in the manner of the inclusive and extractive political and economic institutions.
In such a description The European Union is a union where some member states have inclusive political and economic institutions and offer this Knowledge to the rest.
Since the institutions of flexicurity in some member states (such as Greece, Italy, Spain, Portugal and France), may be is prohibited by their individual national constitutions, the manifesto proposes well-prepared country referendums in these countries for changing the constitutions.
There is no sense in money transfer among countries with vast differences in the political and economic institutions, except in the case of humanitarian crises.
In the past money transfer among countries have been used to strengthen the extractive political and economic institutions of each country.
It is easy to use money transfer among countries and to change their institutions to inclusive for each and every citizen.
For this reason, it is necessary to ask for the agreement of the majority of the populations to change their institutions to inclusive by means of referendums.
Therefore it will be necessary to work out a model government plan to suggest to the citizens of each country.
The Best Inclusive Political and Economic institutions in Europe and the World. (2)
The current standard of inclusive political and economic institutions
In the view of the manifesto the current standard of inclusive political and economic institutions are the Nordic countries.
That means that we do not need more economic freedom with less government spending for the member states than the Nordic states, but we need a strengthening of the Nordic model as a current standard for a European social model.
We need to copy the political and economic institutions of these states.
The Nordic countries succeeded in making the institutions inclusive for all of their citizens.
The success of the Nordic countries prove that the old debate between a private and a public sector is meaningless since the real opposition is between inclusive and extractive institutions.
Both the private and the public sector can operate flawlessly in coordination with the inclusive political and economic institutions of the Nordic countries.
Both the private and the public sector can operate destructively in coordination with the extractive political and economic institutions of Greece, Italy, Spain, Portugal, Turkey, Russia,...
Maybe a liberal would ask why he should accept the high government spending of the Nordic countries.
The answer is that we must try to create open societies with inclusive political and economic institutions acceptable to the majority of the citizens not just a few liberals.
This is the only way of preserving and enhancing the inclusive political and economic institutions.
Furthermore, the core principles of Flexicurity are liberal, social liberals have developed inclusive institutions in the labour market.
The flexicurity is the implementation of Hayek's limited financial security for all citizens in the Nordic model as opposed to absolute financial security for part of the citizens in the Mediterranean model.
The Extractive Political and Economic Institutions trap.
The evolution of the inclusive political and economic institutions took plenty of time and caused a lot of blood in many countries during the previous centuries.
The recurrent pattern seems to be, that when a group of people have access to economic power, usually through trade, they challenge the political power of the oligarchs and make the political and economic institutions more inclusive.
Afterwards this group of people try to preserve the new situation for themselves, but new challengers are arriving on the scene to make the political and economic institutions more inclusive.
At the end of this process, there is a need for the high and medium income groups to include the lower income citizens in their institutions.
This process for more inclusive institutions has been stopped in some Southern European countries like Greece and some countries of the former Soviet Union.
Their constitutions preserve permanent jobs and a rigid labour environment, which separate the labour force in insiders and outsiders.
In Greece, extractive "rights" (of permanent jobs and high pensions) are distributed to part of the citizens through Clientelism.
People who do not have "rights" do not rebel against those who have "rights" because they are often “related”.
Because the rights are constitutionally entrenched people find it easier to demand the same rights rather than challenging them.
This process tends to draw people to populist politicians of the extreme right and left.
Furthermore, a big part of the private sector in Greece is Crony capitalism
Some Cases of Successive Change of Political and Economic Institutions Without Civil War.
The West German population voluntarily changed Nazi extractive political and economic institutions to inclusive after the defeat of Nazi Germany.
The East German population voluntarily changed their extractive political and economic institutions to inclusive after the fall of the Berlin Wall and the unification with the West Germany.
Estonia and other countries seem voluntarily to have changed their extractive political and economic institutions to inclusive after their admission to The European Union.
Unfortunately, the Estonian model cannot be regarded as a global model, because Estonia has not yet developed a social state like the Nordic countries
A Proposal for Changing the Political and Economic Institutions by Means of Country Referendums and Change of Cash Flows.
The political and economic institutions of every state creates and preserves the main cash flows in society.
We propose a referendum to be held for all citizens asking if they accept changing the cash flow so more citizens can have a better income than they have during the current situation and a high level "limited" financial security as in the Nordic model.
The same referendum should also incorporate the question of changing the constitution that prohibit the implementation of Flexicurity institutions.
This does not mean they will automatically obtain the same wages as people in the Nordic countries, but that they will obtain the political and economic institutions of Nordic countries first - together with the Nordic welfare state model.
Τhe Threats to the Inclusive Political and Economic Institutions.
The manifesto suggests that the Turkey of Erdogan and the Russia of Putin aspire to stop the integration in the European Union and destroy Europe's inclusive political and economic institutions, destroy the European Rule of Law.
Turkey / Russia are democracies with extractive political and economic institutions, with a global rank score of 80 / 87 respectively in the Rule of Law Index 2015.
In 2016 Index of Economic Freedom Turkey is characterized as moderately free with a score of 76, while Russia is characterized as most unfree with score of 153.
References
(2) The Best Inclusive Political and Economic institutions in Europe and the World.
The Nordic states Denmark / Norway / Sweden / Finland / Netherlands have the most inclusive political and economic institutions.
In the 2016 Index of Economic Freedom they scored 12 / 32 / 26, 24 /16 respectively due to their large government spending.
However Nordic States demonstrate that large government spending does not restrict economic freedom when this is properly managed for all citizens.
Τhe most important point is that regardless of goverment spending the Nordic states manage to satisfy, to a significant extent the Maastricht Treaty
The unemployment rate of the above countries is: 5.8 / 4.8 / 7.0 / 9.2 / 6.5 respectively, in List of countries by unemployment rate From Wikipedia
The Less inclusive (or Extractive) Political and Economic Institutions in the Euro-Zone
The Mediterranean model states, Greece / Italy / Spain / Portugal have the least inclusive (or most extractive) political and economic institutions in The Euro-Zone.
They have the worst score in regional rank in The Rule of Law Index and actually globally rank 33 / 30 / 24 / 23 respectively.
In The Index of Economic Freedom Greece is characterized as most unfree with 138 in global rank, whereas Italy / Spain / Portugal are characterized as moderately free with 86 / 43 / 64 respectively in The Index of Economic Freedom.
The Manifesto suggest that these Mediterranean states have the worst social model, the so-called Mediterranean model.
These Mediterranean states in general fail to satisfy the Treaty of Maastricht, while Greece is already bankrupt.
The unemployment rate of the above countries is 24.0 / 1.7 / 20.4 / 12.3 respectively, in
the list of unemployment rate in different countries ( taken from Wikipedia).
The dominant majorities of citizens in most countries with extractive political or economic institutions (as Greece, Italy, Russia, Turkey ...), challenge the principle of Rule of Law and have their own ideas of what Rule of Law supposedly means in an institutional state.
Furthermore, the labour market and many other markets are extractive markets (non- inclusive).
