I agree. I think that a market-based social democracy, as practiced by a number of European countries, can be a workable system, but there are limits. Such a system cannot compete in a totally unregulated global market, which will always favour the countries that minimise protections for the poorer sections of society. i.e. in the law of the jungle, the toughest and most ruthless will generally prevail without regard to fairness. So if we want fairness, we need some form of regulation.
That's partly the reason why individual European social democracies couldn't keep up with the anglo free market model, at least in the shorter term. The fact that Europe is now suffering along with the anglo countries has more to do with the way they lost confidence in their own model and succumbed to the temptation of greater de-regulation. Still, with a common currency and better cohesion between European nations, I think the European social democracy model can weather the ups and downs of the anglo free market and prove a better deal in the long run.
Another major part of the problem is that the indices we use to rate success in an economic and political system are lousy. "Economic growth", "inflation", "unemployment" - these are at best incredibly crude measures of a population's health and wellbeing. They have been provided by a bunch of economists with their own perspective on what's important (not to mention their own vested interests), and for some reason we have meekly accepted them as gold standards. We need to define measures that more accurately reflect the day to day life of the population and that reflect those things that we want to maximise and those that we want to minimise. It's not hard to do this, and many such indices already exist. We just need to start using them to guide policy.
