Economic policy leaning to the left

Photo: PantherMedia / Scanpix

Even though the economic policy of PM Jüri Ratas' government leans more to the left than those of his predecessors, there is no cause to talk about a clear left turn in Estonia, sociologists conclude.

Postimees ordered a study from pollster Emor in April one of the questions of which asked whether Estonian politics has undergone a left turn. The results saw 33.8 percent of people answer „yes“ and 35.8 percent say „no“.

Left-leaning policy is reflected in some tax changes and increased state intervention in the economy in the form of increased investments.

Political scientist Tõnis Saarts said that study results suggest people are separated into two camps on this issue – those who believe a left turn has taken place, and those who do not.

„Different sociological studies, carried out not only in Estonia, have shown that one third of people do not have a grasp on the political left-right scale nor understand the real meaning of the labels „left“ and „right“,“ Saarts said, pointing to the results of the recent study.

IRL the odd one out

Saarts said that in a situation where Estonia is ruled by a coalition government that has two left wing parties, it makes sense they would look to realize their programs at least to some extent.

„However, one would be hard-pressed to call it a left turn as steps taken by the government have been cautious and hardly revolutionary. We definitely cannot talk about a new leaf being turned over in economic policy or a left turn in the revolutionary sense at this time,“ Saarts concluded.

Sociologist Juhan Kivirähk said he regards the phrasing of the question as very unfortunate. „A left turn is simply a mallet used by the ousted Reform Party on the new government out of frustration, which has bestowed on the term a clearly negative connotation,“ Kivirähk said.

He said that the policy of the new government is more left-wing than the one pursued by the previous one. „In a situation where the state has plotted a right-wing course for years, certain left-wing signs in policy are welcome. It is perfectly natural and to be expected that a government run by the Center Party shifts to the left on the traditional scale compared to its predecessor run by the Reform Party,“ Kivirähk explained.

He added that the main difference between the two wings is tax policy and the relative importance of revenue redistributed.

„Considering the fact that financial inequality tended to grow during financial crisis years, the government's decisions to decisively hike minimum income exempt from tax and alter the principles of the system of I pillar pension are necessary,“ Kivirähk said.

Neoliberalism losing its allure

Political scientist Vello Pettai said that he was among the study's randomly selected participants. „I spent a long time pondering how to interpret the question, and how to answer. A „left turn“ has traditionally been regarded as a situation where power moves into the hands of parties believed to be located left of the center, at least in socioeconomic terms – the social democrats and the Center Party,“ Pettai said.

„Now it has finally happened, even though the Pro Patria Res Publica Union (IRL) is there to muddy the water.“

Estonia has been dominated by a neoliberal economic model, clearly right-wing at heart, since its re-independence. Saarts said that the global financial crisis caused neoliberalism to lose a lot of its former glory.

„It is enough to look at the utterances of politicians everywhere: state intervention and protection of those hit hardest by the crisis is promoted. The recent slogan of „everyone wins when the markets are in charge“ is heard very rarely,“ Saarts said.

Kivirähk said that the neoliberal economic model has had its day. „I believe it would be foolish for Estonia, as a very small country and member state, to try and swim upstream by holding on to austerity policy and stubbornly refusing to borrow,“ he said.

„I for one welcome the coalition's plan of livening up the economy by boosting investments.“

Asked whether the world has examples of recipes for success Estonia could use to replace its recently right-wing model, Saarts said countries in Southeast Asia, China, Scandinavia – successful and ascendant economic models all – none have relied on exclusively neoliberal principles.

Kivirähk said he has always felt sympathy for Anthony Gidden's Third Way policy that has also been described as modern social democracy or new centrism. „And I definitely consider it an advantage that Ratas' government is more socially balanced than Rõivas',“ Kivirähk said. He added that Estonia has often looked north in search of the best social model, and that the example of the Nordics could continue to inspire Estonia in the future.