3 - The Role of the State in Europe

Summary

“'Deregulation’ in the sense of eliminating unnecessary regulations has an intrinsic value, because freedom has a value in itself. Just this fact alone is sufficient, and therefore, it is not even necessary to use ‘effects’ as a justification.“

With this self-confident statement delivered in March 1990, the West German Deregulation Committee, an independent commission of experts in favour of the reduction of market-adverse regulations, introduced its programme with an accompanying list of recommendations citing examples from the insurance and transportation sectors. Deregulation is the restraint of the state, in favour of market self-regulation.

The call for more freedom from state regulations and restrictions in the political, cultural, social and economic sectors was successful in the socialist countries of Eastern Europe in the autumn of 1989. Systems of political suppression and economic failure were dissolved and discarded by the people of these countries. The evident success of politically pluralist and market-oriented systems, contrasted with socialist-communist systems, appeared attractive and convincing. The citizens opted for freedom. Nevertheless there is no way to substitute state control entirely by market forces, regardless of how radical the changes in these systems, and despite the fact that the period of Marxist experimentation in Europe has ended in complete failure.

In addition to this Marxist conception of the state, there are other competing European models and experiments. These specific European perceptions of the state's role will be discussed from three perspectives. In Section 1, various theories of the state, which have traditionally accompanied and influenced the conception, structure and practice of the state in Europe, will be presented. Of interest is the observation that there are differences not only between the continental and the Anglo-Saxon tradition, but between neighbouring continental countries as well. Even with respect to a single country, an evolutionary perspective demonstrates great variations. Germany is an extreme example, having experienced four alternative state systems since the beginning of the twentieth century. These oscillations can be of short duration and may have far-reaching implications, for instance, changes from social-democratic to conservative governments or majorities.

Section 2 will deal with the so-called confrontation between a centralized state system and a free market economy. It will be argued that such a conceptualization does not reflect social, political and legal reality. Instead, state and market are intensively bound together, interwoven, and mutually dependent.