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Version: 28.02.05

New Guarantees

The project is devoted to the elaboration of new concepts of social guarantees with the aim of substituting/integrating the old “passive” guarantees with new “active” ones in the European model of the Welfare State.

Director: Carlo Pelanda

Co-Director: Orsolya Farkas orsolya.farkas@tiscali.it

General objective:

How to switch from passive (redistributive) guarantees to active ones in a way that enables the individual to take the opportunity to increase his/her labour market value by means of active guarantees.

Project description:

The current research project is fundamentally based on the theory and ideas described by Prof. Carlo Pelanda in his recent books (Stato della crescita, Futurizzazione, Sovranità e fiducia - this latter written together with Paolo Savona).

First the relationship between the State and the market must be clarified in the context of maintaining and promoting the competitiveness and wealth of a given country. On the contrary to most political ideologies, neither the State nor the market can be placed in a dominant position to the detriment of the other one. Their relationship must be characterised not by mutual exclusion but by completing each other. A functioning market economy creates wealth, the State establishes the conditions which put all in the position to participate in the production and acquisition of this wealth.

But the State should intervene only in a domain where the market fails to act successfully. Market forces alone do not create opportunities for all, therefore State intervention should regard the establishment of such conditions which correct original inequalities. These conditions are provided under the label of guarantees, which can be divided into collective and individual ones. The formers regard security issues or the establishment and maintenance of legal order and the rule of law, conditions which cannot be provided by profit oriented organisations, but which are indispensable for the functioning of democracy and market economy.

The individual guarantees can be further divided into active and passive guarantees. The passive guarantees have a redistributive nature, they provide financial assistance for those who are temporarily or permanently are excluded from the labour market without modifying the conditions of the individual. On the contrary, the active guarantees can be seen as an investment, which increases the capacities of the individual rendering him/her more valuable for the labour market. The main, but not only instruments of capacity building are linked to basic education, vocational training and life-long learning. Investments in personal capacities will then turn back once these people find an appropriate job on the labour market according to their enhanced competences.

The necessity to switch from passive to active guarantees in the most developed countries of the World is widely recognised in the academic literature, applied research and in the recommendations of various international organisations. This necessity is based not only on the need to limit passive budgetary expenditure and increase the proportion of active labour force, but urged also by the imperative to maintain competitiveness in an ever more global economy. However, the same literature is rather skeletal on the issue of how to implement the shift from passive to active guarantees, or more precisely, how the individual can be enabled to take the opportunity offered by the active guarantees. That is to say, by way of a simple example, that it is not sufficient to offer training in general or start-up credits to new entrepreneurs, but these instruments must be targeted according to the specific needs of the individuals and the market.

The current research project is organised around the conditions an individual needs to take the opportunities offered by the active guarantees. In the nucleus of the active guarantees one can find the right to knowledge, to competences. Passive financial assistance is not excluded for those in the most needy situation, but they should be applied only as a last resort and for a limited period of time. The State will have a major responsibility in allocating collective resources, but the individual must perform in an more active way as well: he/she constantly has to search for opportunities to increase his/her intellectual capacity.

The definition of basic principles and the delineation of the major conditions cannot be fully functional if their articulation stops at a general level. The general standards must be adjusted according to local specificities and their application must be fine tuned according to comparative advantages local conditions can offer. It is assumed that a successful implementation of the active guarantees can be carried out at local level on the basis of the generally defined principles, but in the framework of low scale activities where the individual can play a central role. Therefore particular attention has to be devoted to the interaction between the actors at various levels participating in the elaboration and implementation of active policy measures.