Permanent reform 

A great post by Bjoern Staerk about how the focus of our activities changes from before democracy arrives to once it's established (and sucks); and from before amateur media evolve to once they are here to stay (and suck too).

[This link comes with a special dedication to Christian from eDemokratie.ch.]


The Vaxholm dilemma 

It had escaped me until now, but the ongoing debate over the labour dispute surrounding the activities of a Latvian company in the Swedish town of Vaxholm is instructive. The Latvian company Laval had won a building contract in Vaxholm. It brought its Latvian workers to the site who were paid according to a collective bargaining agreement with a Latvian trade union. This provoked the furor of the Swedish trade union, which demanded that the company pay its workers according to its own, substantially higher collective bargaining agreements with Swedish employers. The Latvian company offered to pay Swedish minimum wages as specified in Swedish law, thus fulfilling the respective provisions in EU-law, but since the minimum wage is below the collective bargaining agreement this was not enough for the Swedish trade unions: they organised blockages of the building site, eventually forcing Laval into bankruptcy. The company then sued for damages. The Swedish government supports its trade unions, arguing that EU-law does not clearly distinguish between minimum wage laws and voluntary collective bargaining agreements, but recently EU-commissioner McCreevy said during a visit in Stockholm that the Commission supported the Latvian side, which in turn provoked a public outcry in Sweden. Carl Bildt has more details.

So, is this a case of 'social dumping' or not? The distinction between minimum wages and collective bargaining agreements is interesting. Austria for example does not have a minimum wage currently, based on the idea that industry-specific collective bargaining agreements provide more flexibility. Maybe the Vaxholm problem could be avoided by giving the individual collective bargaining agreements a status in the law. But this would be only a technical answer.

Is there a point in having sectors of economic activity (such as activities of foreign EU-companies, but potentially also job-creation programs targeting unemployed workers with low qualification levels) that are exempt from collective bargaining agreements that apply to this very sector? If so, this could be used to create a low-wage sector. It is also worth considering that a low, but steadily rising minimum wage can be an effective instrument against long-term-unemployment and provide relief to the working poor, as some European countries have shown successfully. Such a minimum wage system, which a country like Austria would need to introduce new, would also be an important measure to support the introduction of a guaranteed income system, another powerful device in the fight against the current increase of poverty in Western Europe.

In the general case of the export of services within the EU however I fail to see a good reason for why the Latvian workers in Vaxholm should not be paid according to the Swedish collective bargaining agreements. Even if they were paid like their Swedish colleagues, this would not mean that Eastern European companies would not be able to compete in Western Europe, they could still have lower administration costs in the back-office, workers with higher motivation, or other competitive advantages. This part of the country-of-origin-principle just does not make sense: labour regulations and environmental regulations should be according to the destination country, which has made a social choice and decided to accept any resulting costs. Adherence to these regulations by the foreign company should also be subject to the jurisdiction of the destination country. On other regulations - such as for customer protection -companies could be free to choose among origin- and destination-country, but where the country-of-origin is chosen, there should be extensive obligations to inform customers in the country-of-destination about applicable conditions for the transaction.


Vienna election recap 

23:40 Final result SPÖ 49 (+2.1), ÖVP 18.8 (+2.4), FPÖ 14.9 (-5.3), Greens 14.7 (+2.2), KPÖ 1.5 (+0.8), BZÖ 1.2

The TV-discussion was not pretty either. ÖVP trying to signal understanding for a healthy dose of xenophobia. SPÖ soft like butter.

The really frustrating thing is that the situation where the Greens had a chance to be an uncontested third nationwide is now over, FPÖ-Strache announced with some justification that his goal is to come in in third place at the national election in autumn 2006, which would ruin all coalition options except the grand coalition a la Germany. Not good for any hopes of shaking up the traditional lines of tacit understanding and rug-sweeping in Austrian politics.

15% FPÖ voters is bad, but 15% based on the single-mindedly xenophobic campaign the party ran is depressing.

Time for some readjustment of political strategy and also for a painful realignment of hopes, at least for the stort term.

shock in the second projection of Vienna election results 

18:10 Those FPÖ-voters lied in the exit-poll, true to their character. Based on a 32% count the projection now looks like this:

SPÖ 49%
ÖVP 18,6%
FPÖ 15,1%
Greens 14,7%
KPÖ 1,6%
BZÖ 1,1%

I'm very angry right now. I blame chancellor Wolfgang Schüssel and SPÖ-leader Alfred Gusenbauer - the FPÖ has been revived on the anti-Turkey theme set by the two big parties. Thanks a lot.

[technical troubles have delayed this post]

Exit poll 

SPÖ 52%
ÖVP 18%
Greens 16%
FPÖ 11%
KPÖ 2%
BZÖ 1%

surprisingly much for the KPÖ, everything else pretty much as expected. The Greens good, but not as good as I had hoped.

Vienna election day schedule 

15:30 The weather is beautiful. Only bloggers, FPÖ-voters and maybe some SPÖ-voters stay in town on a Sunday like this. Accordingly, first reports [DE] point to a low turnout.

At 17:00 CET all polling stations close simultaneously. There will be an exit poll which may be 2-3% off the result, but which might show the trends. The first prediction based on a partial count will come in at 18:00, then we'll know. My fastest source will be ORF videotext, which was offline for a day or so but has been repaired in time (on a Sunday!). At 22:25 there will be a discussion of leading politicians of all parties to re-evaluate the Austrian political landscape after the last of this autumn's regional elections.

On the level of rumours, in an online forum there was a report of an internal SPÖ-poll from last night that had SPÖ 53%, ÖVP and Greens at 18% each. All is not lost for my bicycle yet.


Great quotes and a question of level of engagement 

Two quotes from unrelated articles in the Economist to make your day:

Regarding the increasing importance of intellectual property rights in the ICT industry [article]:
“Intellectual property has become more central to the industry,” says Greg Papadopoulos, chief technology officer of Sun Microsystems. “I don't know if that is a function of a mature industry, or simply a confused one.”
And there is this in the obituary for Arthur Seldon [article]:
“The ideas of economists and political philosophers...are more powerful than is commonly understood. Indeed, the world is ruled by little else. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.” So wrote John Maynard Keynes, the economic architect of the welfare state and the Great Society, and he should have known.
But consider this scenario: X believes his opinions on economic policy are valuable, even though they differ from those his favourite political party espouses. What is the best use he can make of his resources? Is it to engage in a think-tank like Seldon did-
Mr Seldon's target audience was what he called the “second-hand dealers in ideas”: journalists, teachers, academics, businessmen and city analysts who create the intellectual environment in which politicians have to work.
Even for someone as successful as Mr Seldon was in promoting his ideas, the results may be not as expected-
Much of his early life was devoted to trying to revive the Gladstonian roots of the Liberal Party, even as it succumbed to the influence of Keynes and others. He always regretted that it was the Conservative Party that took up the IEA's [Seldon's think-tank] agenda, not the Liberal Party, where his free-market ideas really belonged.
Or should someone like Mr Seldon have stuck with direct party politics, devoting all his resources to influencing the policies of one party? Obviously this is not a question about Arthur Seldon himself, who judging on the article may have had some inhibitions that would have prevented him from success in party politics - while his later work apparently became hugely influential. But let's assume someone was intellectually somewhat less resourceful than Seldon and at the same time without major inhibitions, wouldn't it then be more effective to do party work than to engage in the potentially more satisfying kind of work that Seldon did? Just wondering.


Frenzy to the Finish 

As the Viennese election campaign - the first political campaign I'm witnessing from inside rather than as a detached observer - has entered its final week, I'm lost in the general frenzy of trying to make sense of all the contradictory opinion polls, trend reports, gossip, and over-generalised anecdotal experiences. I'm pretty clueless about the outcome, which may be unfortunate for a blogger, but I'm enjoying the ride. Naturally I hope that the Viennese Greens will do well - if you're among the approximately 2% of my readers who are allowed to vote in Vienna, please vote for the party of my choice. Convincing appeal, isn't it.

One of the things that strike me is how the party leadership with its consultants had devised a campaign strategy that is so complex that to this day hardly anyone but they themselves fully grasps it. The resulting initial confusion at the grassroots caused some operational friction, but thankfully by now things down here at the bottom are ticking along smoothly, and overall the Greens had a last week that was considered highly successful even by the independent media. To give you an example of the sophisticated nature of the top-level thinking, the Greens have varied the ratios of the individual campaign posters by city-district(!) so as to reflect what their pollsters told them about the demographics of their potential electorate in each district. As Die Presse reports [DE], none of the other parties could be bothered to do anything like that.

I will win a bicycle [DE] if the ballots come in like this on 23 October:

SPÖ 53%
Greens 19%
ÖVP 18%
FPÖ 8%


Go east! [Swedish conservative edition] 

It is a common topos of Austrian oppositional rhetorics to demand that Austria should become like Sweden (or Scandinavia in general): have the world-best education system and social welfare, while still managing the fastest growth rates among the EU-15. Although I'm myself an admirer of Scandinavian accomplishments in these areas, I am sometimes sceptical as to the chances of relocating Austria to Europe's northern region - because of cultural, historical, and geographical differences [from my archive, an ossified post from March 2004].

All the cuter is it to find this paragraph in a speech by conservative Swedish ex-PM Carl Bildt to a Scandinavian business audience on the topic of Eastern Europe:
Why are the Austrians doing as well as they are? It’s not rocket science – look at the map and see what their banks, trading houses and enterprises are doing.
To be fair, Bildt is not an uncritical Austria-fan, his ideological sympathies for the current government notwithstanding. This is what he wrote at the height of the recent crisis over Turkey's EU-accession:
Once upon a time, it was the rest of Europe that came to the rescue of Vienna when it was faced with the onslaught of the Ottoman armies. Vienna seems to be refighting that battle. But in a critical difference, the rest of Europe isn't coming to its rescue. Instead, Austria is isolated among the European Union members. Then, it was right to save Vienna. Now, it definitely is not.


Election update: the countryside is not greening yet 

Second in the string of three Austrian regional elections this autumn, 240,000 inhabitants of the Burgenland-region yesterday gave an absolute majority to the SPÖ. The figures:

SPÖ 52,2% (+5,7)
ÖVP 36,3 (+1,0)
FPÖ 5,8 (-6,9)
Grüne 5,2 (-0,3)

Nowadays the FPÖ celebrates results like this, but the Greens had little to smile about. The largest town in Burgenland is the regional capital Eisenstadt, where 10,000 voters live. It is a flat, largely rural region, making the SPÖ's decades-long domination all the more remarkable [DE]. As for the Greens, there are several explanations [DE] for the stagnation, but from my point of view the most unsatisfactory aspect of this situation is that they still haven't found a formula for responding to the political interests of the mainstream of Austrian society outside of the major urban centers. The Greens may still do well in the Vienna-election on the 23rd of October (polls see them at 16-19%), but the conditions are not yet set for campaigning as an equal 'third force' in Austrian politics on a national level. After the demise of Haider's adventurers, that field should be wide open.

The task: to criticise both ÖVP and SPÖ without mercy whenever they deserve none, and to confront the electorate at each of these instances with better policy proposals that are not part of the legacy of one of the big two.

The difficulty: the relative dearth of original policies in the Green portfolio that are not only well-motivated and sound, but that also have a strong personal meaning for political outsiders. The current debate about a basic income model for Vienna is an example for how this can be achieved.

The potential solution: to make the policy formulation process faster and more profound by listening with an open ear and mind to international debates, including to scientific ones.

The challenge: how to do this as a movement that thrives on its radical internal democracy, where new policy proposals can survive only when they immediately find the approval of a large majority of activists at the bottom of the party hierarchy.

Sounds like an application field for social networking technology?


Labour market regulation: winners and losers 

A readable and very interesting article on the effects of labour market regulation, partly based on a comparison of three French companies with three comparable British counterparts.

W. S. Siebert, Labour Market Regulation: Some Comparative Lessons [via Mahalanobis, via Steffen H.]:
Our conclusion is that labour market regulation designed to improve working conditions and wages, and strengthen collective bargaining obviously does so, but at the expense of reduced employment opportunities for outsider groups: the young, the old and the inexperienced. In particular, it drives up long-term unemployment and youth unemployment. Admittedly, we have focused on just two countries, and then on just three firms within these countries. However, the same conclusions are reached in detailed statistical studies covering OECD countries over the past 30 years. It is true that overall unemployment is not necessarily driven up by regulation, which appears to reduce outflows from jobs into unemployment about as much as it reduces outflows from unemployment into jobs. But unemployment of particular groups is driven up and concentrated. ...

Labour market regulation might arise because it is efficient (a response to market failure), or because it is politically expedient (the 'economics of politics' argument). However, as regards the efficiency view, we have seen that labour regulation is double-edged: the employed gain at the expense of the unemployed. This result does not seem very efficient.

It is easier, then, to explain labour regulation in political terms. The median voter determines how labour market regulation is to be used as an instrument of redistribution. ... the median voter is not unemployed. Moreover, the median voter is likely to be drawn from the majority semi-skilled group. This group is substitutable for the (predominantly unskilled) unemployed, and thus gains when labour regulation prices unskilled workers out of the market. Skilled worker groups and capital lose - though capital is more mobile than labour and can eventually avoid the burden. The fact that left-wing governments that normally represent semi-skilled workers promote labour regulation is in line with the political view. So also is the link between labour regulation and trade union power, since trade unions are strongest among semi-skilled groups.

The political theory can also offer an explanation for why labour regulation changes. For example, when labour demand becomes more elastic, the pay-off from regulation should fall. Globalisation, by making capital become more mobile, and countries more open, will have increased labour demand elasticity, and this could explain the slight tendency towards deregulation ...


Where Austrian xenophobes are headed next 

'Heute' is a free newspaper that is distributed on the Vienna underground system. Sadly, on 26 September its editorship was taken over by Eva Dichand, the 32-year old daughter-in-law of Hans Dichand, who is the powerful editor of the unspeakable 'Krone' newspaper, read daily by 3 million Austrians. As you can see from the headline in the screenshot, which is also on the frontpage of today's print edition, Eva Dichand's new strategy for the previously harmless paper seems to be to overtake even the Krone in xenophobic agitation. The headline reads: "After Turkey's victory: EU also wants Serbia!". Not good for my stomach.


The Guardian: 'stories of Austria's "problem" continue to abound' 

Emma Brockes makes her own contribution to the tradition, in an attack piece titled "The question: what is Austria's problem?".

Meanwhile, at the Guardian newsblog, Simon Jeffery kindly discusses my entry from last Friday in a post that is more lyrically titled "The truth is in the stuffing". Sadly for me, in the end Jeffery takes me to have said that Schüssel wanted negotiations with the goal of priviledged status (did I really write that? Can't find where). On the basis of such a criterion Jeffery concludes that, against my prediction, Schüssel failed. To repeat what I meant to say, I think Schüssel wanted negotiations for full membership, but for a variety of reasons he also wanted an additional feeble reference to the possibility of other scenarios in the text, for which he could then claim the credit. On that criterion, I agree with Brussels Gonzo over at afoe that it is not easy to see whether Schüssel has succeeded or failed. At the end of the day, this determination does not matter so much, since the outcome is in any case good enough for Schüssel to be able to spin it in his favour come the next national election campaign (although clearly the opposition will try to spoil his cynical fun).

Back to Emma Brockes with a point-by-point rebuttal of her Austria-bashing... No, there's no point. Once you live in a "land of Edelweiss and yodelling" where "one can scarcely open a cupboard without stumbling across an old Nazi in hiding", "with the memory of former Nazi president Kurt Waldheim not quite dead yet" and where "any skin tone deeper than light tan is enough to make one stand out in Salzburg", then you won't be surprised that "recently the world's most prominent Austrian, Arnold Schwarzenegger, was found to have a Nazi father hiding in the cupboard." It is then only a natural conclusion on behalf of Brockes that "Austria exhibits a certain cultural difference from the 24 other nations of Europe who voted to allow Turkey into the EU. Perhaps it should consider altering the terms of its membership."

Ostracised from without and within, you may then be forgiven for a little, almost complacent gasp of exasperation and for calling it an early night.


EU-Turkey-Austria: prediction of last-minute success 

12:00 CET: While Austria has made it to the CNN front-page with this article (a feat usually accomplished only when cable-cars full of tourists crash, or burn in tunnels), last-minute negotiations are still continuing five hours before the deadline in order to overturn the country's opposition to starting EU accession negotiations with Turkey without mentioning an alternative to full membership.

In addition to what I said before the week-end, I'll add that I'm convinced a solution will be found, since the Austrian government has more to lose by wrecking this process than it can gain: any hopes of re-election of the current government next fall hinge on a successful EU-presidency in the first half of 2006. Being an isolated scapegoat of the club would surely prevent that. So.

PS: I belong to the 10% of the Austrian population who are in favour of Turkish EU-membership under the conditions already specified.


Styria has voted 

and the ÖVP has got the reward for a disasterous last period in power and an equally disasterous election campaign - the post of provincial governor goes to the SPÖ for the first time in 60 years. The Communist Party of Austria becomes the third largest party in the province, surging from 1% to over 6%. The Greens fare badly, the FPÖ and BZÖ split their remaining votes so that both of them fail the hurdle for representation in the regional assembly. ÖVP-renegade Hirschmann (LH) fails as well. The figures:

SPÖ 41,7% (+9,4) ; 25 assembly seats (+6) ; 5 government seats (+2)
ÖVP 38,7 (-8,6) ; 24 (-3) ; 4 (-1)
KPÖ 6,3 (+5,3) ; 4 (+4)
Grüne 4,7 (-0,9) ; 3 (+0)
FPÖ 4,6 (-7,8) ; 0 (-7) ; 0 (-1)
LH 2,0
BZÖ 1,7

A good analysis [DE] on the weblog of Johannes Rauch, the leader of the Greens in Vorarlberg province.

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