Debate: There Is No Such Thing as a Free Lunch
Toomas Hendrik Ilves: “Wimpy’s Hamburger,” Diplomaatia, No. 100, December 2011; “I’ll Gladly Pay You Tuesday,” Policy Review, No. 172, April/May 2012, Special Edition: “Mars and Venus, Ten Years Later.”
When a head of state publishes a fundamental essay in the media, it usually attracts attention, especially if in addition to the domestic scene this also concerns a respectable international journal – to be more specific, if an article is printed in the most influential local policy paper, Diplomaatia, and its English version is released in a special edition on European-American relations of Policy Review, an eminent publication of Stanford University.1 Besides Toomas Hendrik Ilves, the special edition included such authors as Robert Kagan, Robert Cooper, Ivan Krastev, Charles A. Kupchan and Kurt Volker. Postimees admittedly published excerpts from the president’s article printed in the jubilee issue of Diplomaatia, but that was the full extent of the debate. Yet quoting does not equal a meaningful exchange of ideas. As a rule, the Estonian media seems to be rather more interested in the first lady’s hats. Alas, this situation reflects the general mood in the country.
There were hardly any comments on Policy Review’s special transatlantic edition in the local media, despite the fact that the president’s essay attracted considerable international attention. Still, the whole edition was quite interesting. Its editor Tod Lindberg asked thinkers in America and in Europe to discuss Robert Kagan’s seminal article which had posited that “Americans are from Mars and Europeans are from Venus.”2 Ten years had just passed from the publication of this article, making it a pertinent discussion. To start with, Kagan emphasises that back in the day it was not exactly planned that way, that the essay had been written before 9/11 and that it should not be viewed as a justification of US policies that were to follow. In actual fact, the authors represented in the special edition write relatively little about Mars and Venus, concentrating on other issues. For example, Konstantin von Eggert focuses on Russian power and Russian weakness; Ivan Krastev contrasts authoritarian capitalism versus democracy. While Constanze Stelzenmüller’s essay offers bleak predictions for the West, Kurt Volker and Charles A. Kupchan in particular hold substantially more optimistic views.
Ilves, too, does not write that much about Mars and Venus. However, he is fairly ironic about the West’s naí¯veté to the realities of Communism and harshly critical about the anti-Americanism of European intellectuals. Having been convinced that America could be used as a convenient scapegoat to demonstrate their intellectual superiority and that Europe was a place where the Americans would stay forevermore, the latter have relentlessly been scoffed and spat at. At the same time, people tend to forget that until 1917 the USA was an isolationist nation that did not interfere in European matters. Now that the European century has effectively ended, it has been replaced by a Pacific era. And how does Europe react? It stands aghast; it is confused; it does not perceive this as normal development, but as punishment. The situation is further complicated by the fact that Europe has actually handed its defence over to the Americans in its entirety – 77 per cent of NATO’s defence budget is financed by the USA. No wonder that the issue has caught the attention of American politicians, making them ask all kinds of questions.
Judging by his essay, Ilves suggests that the redefinition of the concept of ‘Nordic countries’ to include the countries that are located around the Baltic Sea could solve the situation. According to Ilves, the new Nordic countries would not include Great Britain despite its active interest in Nordic cooperation, but this does not alter the general gist of the essay.
Ilves claims that the Nordic countries act differently from the majority of the rest of Europe as they manage to balance their financial needs and resources, while also developing their economies.
Still, Ilves’s article suffers from one weakness: he does not exactly say which nations are to be included among the Nordic countries and what kind of fundamental changes have affected them during the previous decade. So, any policy could be interpreted to aspire towards Nordic values which are supposed to be completely different from Baltic ones, yet these have become increasingly similar over the last ten years.
It is ever harder to talk about social democracy in the Nordic countries. Sweden is governed by probably the most right-wing government in Europe, a government that pursues classic conservative policies. Finland recently elected a man who upholds conservative values as president. Moreover, Sweden is far from embracing Obamaish stimulus ideology as the country prefers the use of quite harsh methods for dealing with companies in economic difficulties. This very policy has brought Sweden success and has made it one of the few countries in Europe which has managed to keep its finances in check, securing a second consecutive election victory for the Conservatives. No wonder UK Prime Minister David Cameron wants to join the club! Sheer inability to perceive and realise this allows some circles to hail the return of soft Nordic values and the victory of social democratic ideas. The ‘power of caring’, gender quotas, same-sex marriages, etc. seem to go down well with voters at election time. The Social Democrats are, of course, aware of the fact that the only viable option for sound policy-making is to abandon social democratic ideas. Joakim Helenius pointed out recently that the leader of the Estonian Social Democrats, Sven Mikser, had enough brains not to believe what he had been preaching to the people. We will soon find out whether or not that is the case. Before elections, people are always showered with all kinds of promises on which it is difficult to deliver in real life.
One option for building a welfare state is to increase its debt burden drastically. Considering Estonia’s current low debt burden, this might not be too risky, but it would still bring serious consequences in the future because, after all, borrowed money has to be paid back, the more so as it would not be used for one-off, but for running costs. The second, exceedingly more complicated and unattractive option for increasing public revenues is to raise taxes for higher-earning or wealthier people. This policy, however, does not ensure sustainable success because one day class antagonism will create a situation where there simply will not be any rich people left and then will come the turn of everyone else. This reminds me of a story about Nazi Germany where those whom many hated were first taken away and then the same happened to everyone else.
The third option is to decrease national defence expenditure dramatically. The Swedish Conservatives have not opted for this one – they are swimming against the flow in Europe by fulfilling NATO requirements better than most of its member states. In addition, Sweden has abandoned its social democratic neutrality policy, declaring that it would not sit idly by while its neighbours were being threatened. Alas, political arguments over, for example, the extension of the activities of the Nordic Brigade have demonstrated that the rise to power of the Social Democrats would induce fundamental changes in this domain. In a similar vein, the Estonian Social Democrats have tabled motions to cut the share of defence expenditure in the state budget. I will not even mention the damage this move would cause to Estonia’s international authority, but I will nevertheless ask everyone to contemplate its consequences for national defence. If the share of defence expenditure was cut in a situation where your neighbour annually increases its defence budget by more than 20 per cent, you would be playing with fire. Been there, done that – we should learn from our history.
This is the new populism which Ilves refers to in his essay – not the populism that spread in Europe in the 1930s, but a new type of phenomenon that may also retain right-wing features, but is still directed against ‘injustice’. What kind of injustice or how it manifests itself is a different matter. It can take many forms, international and domestic ones. Why should we pay for Greece who is responsible for its own troubles? Why should we let the rich receive high parental benefits or why do we not tax their excessive incomes? These slogans are more closely intertwined than we would expect. This means that the new populism threatens the balance and the development in the Nordic countries by inducing nations and peoples to take irresponsible decisions that create new problems, instead of solving them. In actual fact, people should be told in a straightforward manner that a welfare state built on loans cannot be sustainable and that we will be facing hard times. At the moment, our bus drivers, doctors and builders are eager to go to Finland where they can earn higher wages on account of borrowed money; the same could be done in Estonia – the only question is for how long. Still, we do not know what the concept of ‘Nordic countries’ means exactly. Major efforts should be made to clarify the matter, so that we could prevent the rise of the new populism in Estonia too.
1 See http://www.hoover.org/publications/policy-review/8856. – Ed.
2 Robert Kagan, “Power and Weakness,” Policy Review, No. 113, June/July 2002. See http://www.hoover.org/publications/policy-review/article/7107. – Ed.