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By:

Shoumojit Banerjee

27 August 2024 at 3:27:52 pm

Europe in the Twilight of Certainties

From pension disputes in Paris to housing protests in Athens and Tirana, mounting unrest exposes the strains in the continent’s postwar social settlement. Liberty Leading the People, by Eugène Delacroix, 1830. Paris’s defaced Monument to the Republic. Civilisations sometimes encounter their most perplexing problems not when they fail, but when they succeed too well. Between the 1880s and the mid-20th century, Western Europe achieved something unprecedented in human history. Clean municipal...

Europe in the Twilight of Certainties

From pension disputes in Paris to housing protests in Athens and Tirana, mounting unrest exposes the strains in the continent’s postwar social settlement. Liberty Leading the People, by Eugène Delacroix, 1830. Paris’s defaced Monument to the Republic. Civilisations sometimes encounter their most perplexing problems not when they fail, but when they succeed too well. Between the 1880s and the mid-20th century, Western Europe achieved something unprecedented in human history. Clean municipal water, mass vaccination, antibiotics, and statutory pensions rendered old age less precarious, childhood less lethal, and disease less routinely fatal. Living into one’s eighties ceased to be an extravagant wager against nature and became a standard civilisational expectation. But this demographic triumph created a political challenge: How does a society honour its financial and social promises when citizens live significantly longer and the inflow of young tax-paying workers can no longer keep pace with those retiring? According to Eurostat, citizens aged 65 or older accounted for 22 percent of the European Union’s population in 2025, up from 17 percent in 2005. Over the same period, the EU’s median age rose from 39.6 to 44.9 years. In Italy, the median age has reached an astonishing 49.1. It is tempting to look at the unrest rippling across European capitals, from pension strikes in Paris to housing protests in Athens and Tirana, and label it a simple crisis of state solvency. But the deeper question is whether a social settlement forged for one demographic and economic era can survive another without destroying the moral principles that justified its creation. Bismarck’s Irony Bismarck, the conservative who built the welfare state to save the monarchy. In the 1880s, the fiercely conservative Otto von Bismarck, the ‘Iron Chancellor’ of a newly unified Germany, paradoxically laid the foundations of the modern welfare state. Sickness insurance in 1883 was followed by accident insurance in 1884, and old-age and invalidity pensions in 1889. Bismarck recognized that rapid industrialisation had clustered urban workers in crowded German cities, generating acute economic vulnerability and fuelling the rise of revolutionary socialism. His calculated move was to bind the working classes directly to the Imperial state through statutory protection. As the British historian A.J.P. Taylor famously observed in Bismarck: The Man and the Statesman (1955), Bismarck sought to buy off the proletariat with a state pension, offering social security to render revolutionary socialism redundant. The delicious historical irony here was a conservative chancellor seeking to preserve a monarchy established institutions that subsequent generations of Social Democrats would expand and defend as universal human rights. Bismarck’s achievement lay in making social protection a systematic, law-bound responsibility of the modern state. Yet, the state Bismarck built was never intended for a continent where mass longevity would become the norm. Malthus Inverted Malthus, Prophet of too many mouths, in an age of too few workers. In 1798, Thomas Malthus published his Essay on the Principle of Population, arguing that human numbers would inevitably outstrip the earth’s ability to feed them, checked only by war, pestilence, and famine. For the next two centuries, Malthus served as the patron saint of economic pessimism, warning that human progress would always founder on material limits. Today, Europe faces an inverted Malthusian nightmare where the crisis is not too many mouths to feed, but too few working hands to generate the tax revenue needed to support an aging society. This demographic imbalance cannot be reduced to a ‘moral’ failing on the part of the elderly, who planned their retirements around long-standing legal contracts. Nor is it the fault of younger generations, who face high housing costs, real wage stagnation and insecure labour markets. Furthermore, the current protests are not just about pension ages. Greece has seen university students and teachers protest over runaway rent prices, low purchasing power and public education cuts. In Albania, mass citizen movements like Lëvizja Bashkë have mobilized against state corruption, oligarchic urban developments and the mass emigration of young talent who see no domestic future. Viewed from the periphery, the street unrest is less about generational warfare than institutional capture. The post-war European generation built families under conditions of expanding public housing, rising real wages, and shared prosperity. A state cannot reasonably expect its youth to embrace the family-building norms of their grandparents while operating under the wages and housing odds of the present. Postwar Pluck The modern European welfare state acquired its moral authority after the Second World War. Having mobilized entire populations for war, governments faced a peace-time question: if the state could demand everything from citizens in conflict, what security did it owe them in peace? In Britain, William Beveridge’s 1942 report mapped out a war on five “Giant Evils” of want, disease, ignorance, squalor and idleness. Across Europe, distinct social models emerged - from Britain’s universal services to France’s labour-managed funds, from West Germany’s social market economy to the Nordic universal safety nets. As the Danish sociologist Gøsta Esping-Andersen observed in his classic The Three Worlds of Welfare Capitalism (1990), these were not uniform social-democratic experiments, but fundamentally different compromises balancing the responsibilities of the state, the market and the family. Crucially, these welfare expansions were underpinned by an exceptional historical moment what the French demographer Jean Fourastié dubbed Les Trente Glorieuses (the “Thirty Glorious Years”) of economic expansion between 1945 and 1975. This period was characterized by high productivity growth. rapid industrialization, low unemployment and a massive baby-boom workforce. Thus, expanding welfare was easy when a wide base of young workers supported a small apex of retirees. But over decades, public pensions and universal healthcare ceased to look like historical compromises dependent on economic growth and began to resemble rights as immutable as the seasons. Pay-as-you-go pension systems are essentially intergenerational compacts which hold that current workers will finance current retirees, trusting that future workers will do the same for them. That trust faces a structural political asymmetry. The defender of an existing entitlement is an active voter with an immediate stake. The younger or future taxpayer who will shoulder the long-term bill faces a cost that is dispersed and easily deferred by politicians. In The Logic of Collective Action (1965), Mancur Olson explained how small, well-organized interest groups routinely outmanoeuvre large, diffuse populations. This dilemma is not entirely new and history offers compelling parallels. In 5 CE, Emperor Augustus faced a severe crisis when retiring legionnaires demanded promised land and pensions that the state could no longer afford. To prevent military rebellion, Augustus established a dedicated military treasury (Aerarium Militare) funded by new sales and inheritance taxes. Rome learned early that when state promises outpace fiscal realities, it destabilizes social peace. It is easy to reach for grand literary narratives of decline. Gibbon found gloomy majesty in Rome’s slow decay while Oswald Spengler prophesied the deterministic winter of Western civilization. Yet, merely treating the current unrest sweeping Europe as a story of civilisational collapse misses the mark. The challenge today is to re-engineer its institutions with the realization that there are no frictionless policy choices. Raising retirement ages is fiscally necessary, but imposes a heavier burden on manual labourers than office workers. Raising taxes risks dampening economic dynamism while increasing immigration helps plug labour deficits, but requires integration and social cohesion. Shakespeare’s King Lear dramatically illustrates that political crises erupt when authority and entitlement are divorced from ongoing responsibility. Lear sought to retain the privileges of majesty while shedding the burdens of governance – something all too observable in today’s European leaders. The post-war generation’s achievement was that they had the intellectual courage to construct institutions capable of answering the realities of their era. They certainly had the leaders and political will. Europe today needs to recover that courage to renegotiate its terms. The arithmetic is demanding, but it is not a Götterdämmerung written in the stars.

Indian Shipbuilding A Must Win Marathon

Writer: Capt. Naveen S Singhal
Capt. Naveen S Singhal
Dec 5, 2024
4 min read
Shipbuilding

With a coastline of 7500 KM, it is hard to imagine, that for the first 20 years (1947-1967) India had no ‘shipping ministry’. In 1967 a Shipping ministry “coupled” with ROAD transport was established. Since then, this ministry has been on a name changing ride, not once, not twice but six times. In 2009 the “ROAD Transport and Highways” was de-coupled and ‘Shipping’ ministry was formed. Turning point came in 2015 with a clear maritime vision for 2030 and 2047. Ministry was re-christened, aptly to Ministry of “Ports, Shipping and Waterways” in 2020.


Why is Shipbuilding important for a country?

a. A Shipyard becomes an opportunity hub and like a queen bee requires the support of an industrial colony to manufacture machinery and equipment.

b. National Shipyards support fleet renewal needs of the Navy.

c. Contributes to national GDP, increases inflow of FOREX.


Korea shipbuilding is 8% of GDP. Japan’s automobile industry is 2.9% of GDP. India’s shipbuilding a meagre 0.000578% of GDP. In context, India’s pharmaceutical industry, ranked third largest in the world is 1.72% of India’s GDP.


International Shipbuilding Market

The market is estimated to reach around USD 200 billion by 2029, growing at a CAGR of 4.84%. While India is at bottom with 0.07% of world share, behind Philippines 1.5% and Vietnam 1%, however on the positive side, India has done well in taking care of its defence needs, with 37 of 39 Naval ships being built in India yards. Rear Admiral S Shrikhande researching on maritime as a Fellow at Wollongong University, Australia, says “Shipbuilding in India needs both, serious incentivisation and dogged determination and not harping on being a big ship breaking country. That Garden Reach shipyard has a $54 million order for merchant ships from a German owner, is a good sign.”


Were Shipyards of 20th century in Flight mode?

Prominent shipyards in India were built in the colonial period. Mazagon Dock 1774, Garden reach 1884, Hindustan shipyard 1941 to cater to British navy and merchant fleet needs. Cochin shipyard 1972, Adani Katupalli 2013, Reliance Naval and Engineering, Rajula Gujarat 1997 and others have limited capacity, hence a lot more work to do. Capt. Subhangshu Dutt (Singapore) a mariner and now a shipowner, says “GOI should hold hands in any collaboration till the marriage with the foreign entity is reasonably stable. He also suggests that “new shipbuilding sites should be given to existing successful shipyards since they have decades of experience and talent. Consortium of 3 or more parties may also be good idea”.


Shipbuilding GOLD

As per SPLASH report the demand for LCO2 carriers could reach 2,500 ships by 2050. As per other estimates, 40% of global fleet of ships could have wind propulsion by 2050. A surge in such vessels is due to an unparallel waves of decarbonization in the shipping industry. Demand for ships with ‘carbon neutral’ badges, such as Dual fuel, Wind assisted, Nuclear fuel ships, Hydrogen powered ships, Liquified CO2 (LCO2) carrier, is outstripping supply. A must in the ‘bucket list’ of every Shipyard. Pinning down a standard ROI in shipbuilding is not easy, but experts suggest it could range from 4% to 15% for the high demand ‘carbon neutral’ ships. While an LNG new build vessel could cost US$ 250 million upwards.


International collaboration

On China’s shipbuilding success story, Manoj Pandalanghat (Singapore) a mariner and ship owner believes that “China has around 50 active Shipyards. Each have a few large dry docks. In each dock two or more large vessels are built simultaneously. Thus, a single yard is able to roll out 2/3 vessels/month, 36 vessels/year and 50 shipyards roll out 1800 vessels/year”.


China could be a jaldi-5, but India needs a sturdy Mount Fiji. Besides technology, Japanese bring the most important hand baggage of soft-skills and culture, essential for success from keel laying to delivery. Maruti’s is a standing example.


Food for thought for New Delhi

a. Expertise: Hire Naval Architects and shipbuilding experts with current international experience.

b. Government assistance: Land, Financial support, subsidies and timebound clearances.

c. Monitoring: PMO should monitor the first 5 to 10 years till Shipbuilding takes-off on this long-haul flight to destination 2047.


India’s Shipbuilding is expected to grow to $237 billion by year 2047. On a back of the envelope calculations this works out to about 4% of India’s 2047 projected GDP of $ 5 trillion. While cars are driven on roads, however the Ministry of roads and transport has little to do with “Automobile manufacturing”. On a similar note, ‘Shipbuilding’ as an industry has little to do with Ports, Shipping and Waterways, thus it may be worthwhile to consider a separate ‘Ship-building’ wing in the Ministry of Ports, Shipping and Waterways headed by a dynamic cabinet rank minister. Since 2047 targets are stiff and an uphill task, so in all probabilities, the officials in Ministry of Ports, Shipping and Waterways are likely to push beneath the carpet, delays and failures of Shipbuilding with sweet success stories of “Ports, Shipping and Waterways” and if this does happen then India will not only miss the Shipbuilding bus of 21st century but a lot more from a national security and strategic perspective.


(The author is a Shipping and Marine consultant. Member Singapore Shipping Association and empaneled with IMO as a specialist consultant. Views personal.)

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