Crisis as Opportunity: Roads towards Social Capitalism

The paper takes its point of departure from the current multifaceted financial crisis in the World economy. It considers against this background different concepts of the "Welfare States" (for short: good, bad and ugly), their recent focused reformulation of the good case through flexicurity proposals, and the modeling of such an economy in a recent issue of this Journal. It then proposes an extension of this labor-market oriented flexicurity concept towards a more balanced system, called "Social Capitalism", where households’ life-course perspectives, the educational system and elite formation are considered as the fundamental pillars of such a society. We then argue that such an ideal social architecture for a capitalist society can be an important guide for the formulation of compromises between the current status quo of a small Euro-economy (here Greece), allowing thereby for a significant alternative to the proposals that are currently debated with respect to the Greek situation. We consider the addition of such a tentative reform proposal as best scenario among the given ones. We understand the Greek economic and political crisis situation as an opportunity for significant if not radical reforms, by contrasting it with a return to the Drachma as the worst scenario.