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Faculty of Economics

Tuesday, 30 June, 2020

Dr. José Gabriel Palma, who retired from his Senior Lectureship in the Faculty in 2014, delivered the "Amartya Sen Lecture" at this years Human Development and Capability Association Conference in New Zealand (Online). The title of his lecture was "What Went Wrong With European Social Democracy: On Building a Debilitating Capitalism, Where Even the Welfare State Subsidises Greater Market Inequality".

Watch Dr. José Gabriel Palma give the Amartya Sen Keynote Lecture at the 2020 HDCA Conference below

In the lecture Dr Palma elaborates on a proposition advanced in a previous paper of his: that the only sustainable progressive and enabling social and distributive agendas are those anchored in an economic agenda that already leads to low levels of inequality in the market. In other words, from the perspective of sustainability and economic efficiency, and also from that of functionings and capabilities, it matters whether low levels of inequalities have been achieved already in the market, or if they are achieved only subsequently via taxes and transferences. Yet European countries have let their markets reach Latin American levels of inequality (and have done so happily), while simultaneously attempting to sustain their traditionally low levels of disposable income inequality via taxes and transfers. As a result, the average share of ‘social protection’ in overall public expenditure among European Union countries stands at 40 per cent — and including health and education, this share jumps to two thirds. Meanwhile, they have given a generous new tax status to those who have benefited most from this increased market inequality; and as there are limits to how much they can tax everybody else, governments’ debts are mounting. The idea that inequality should be dealt with ‘at source’ (i.e., in the market) has become totally alien to the new social democratic ideology, which is stuck in the past twice over: in their social agenda, they just want to replicate the past, while in terms of their economic agenda, they seek to construct a future which is almost the exact opposite of that past. Such an inability to deal creatively with the inevitable “uncomfortable uncertainties” of change has deprived this ideology of most of its social imagination. This has led to a major political dilemma in the advanced as well as in the emerging worlds, because while this impoverished ideology has lost its legitimacy, more progressive discourses have so far been unable to generate sufficient credibility."

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