Paskal Vandenbussche / Productivity Without Responsibility

Productivity Without Responsibility: The Quiet Dismantling of Europe’s Social Contract

Belgian politician Bart De Wever recently claimed that productivity was the motor of the welfare state—implying that Europe must recover that spirit to regain prosperity. He is right to point to productivity as a driver of prosperity, yet he forgets that it was regulation—not its absence—that turned growth into welfare. The productivity boom that sustained Europe’s post-war welfare states was never purely economic; it was anchored in strong social regulation. Labour rights, environmental standards, and redistributive policies ensured that industrial growth translated into wellbeing.

Today, however, the call for “more productivity” is too often paired with demands for less regulation. That inversion breaks the historical link that made productivity socially legitimate. We are entering a new industrial wave—digital, green, and global—but trying to power it with a deregulated model. If the last industrial revolution needed rules to humanize progress, this one needs them even more.

The pressure exerted by major corporations on European and national authorities during the debate over the Corporate Sustainability Due Diligence Directive (CSDDD) has reinforced this misleading narrative: that only deregulation can preserve competitiveness—and, by extension, the welfare state. Letters from TotalEnergies, Siemens, and other Franco-German multinationals, alongside reports exposing ExxonMobil’s lobbying of EU policymakers to dilute or drop the directive’s climate provisions, illustrate how economic power is mobilized to redefine the limits of responsibility. This discourse frames regulation as an obstacle to growth, when in fact Europe’s welfare states were built on regulation—rules that ensured productivity served collective wellbeing. By equating accountability with economic decline, corporate lobbying erases the historical lesson that regulation is not a burden but a framework of trust. Deregulation may offer short-term relief to a few global actors, but it undermines the long-term social contract that once made Europe both competitive and cohesive—a model where growth was guided by fairness, not freed from it.

Regulation is not bureaucracy; it is the invisible architecture that converts productivity into shared prosperity. Without it, we risk building not a renewed welfare state, but a fragile economy—one dominated by a few corporations while societies around them erode. As Michael Porter and Mark Kramer reminded us, “the competitiveness of a company and the health of the communities around it are mutually dependent.” Strong economies need that reciprocity—where business and society strengthen, not exploit, one another. That balance cannot exist where growth is detached from responsibility or where productivity is pursued at the expense of wellbeing.

In his lecture at the University of Ghent, Bart De Wever mocked Europe’s limited innovation, contrasting American advances in artificial intelligence with what he called “Europe’s innovation: the cap attached to a plastic bottle.” Yet he conveniently omits scientific findings such as The Unpaid Toll: Quantifying the Public Health Impact of AI (2024), which warns that “data center operation significantly degrades air quality through emissions of fine particulate matter, substantially impacting public health.” The study estimates that by 2030, the public health burden of U.S. data centers will exceed $20 billion per year, double that of coal-based steelmaking and comparable to the cost of on-road emissions in California. These costs, the authors note, disproportionately affect economically disadvantaged communities, where the per-household health burden could be 200 times higher than in less impacted areas.

A related study by UC Riverside and Caltech found that pollution from backup generators at data centers in Northern Virginia drifts across several U.S. states, generating regional public health costs of $190–260 million annually. If those generators operate at maximum permitted levels, the cost could rise tenfold—to as much as $2.6 billion a year. In some areas, the health costs linked to AI processing centers already exceed what tech companies pay for electricity.

So, while productivity may indeed be a motor for prosperity, unregulated productivity becomes a cost for the State—and ultimately for society. The renewed welfare state De Wever calls for cannot be sustained solely by government spending; it requires corporate participation and accountability. The pursuit of productivity through deregulation will not restore the welfare state—it will only enlarge what the authors called “the unpaid toll”: the social and environmental costs that neither corporations nor the State can continue to ignore.

A renewed welfare state will require, as Porter and Kramer suggested, an active commitment by companies to create shared value—that is, to adopt policies and practices that enhance their competitiveness while simultaneously advancing the social and environmental conditions of the communities in which they operate. In essence, Porter and Kramer argue that wellbeing of a community is no longer the sole responsibility of the State: companies have a vested interest in it, because a successful business needs a healthy community, just as a healthy community needs responsible business. Yet today, many political leaders and corporate actors return to a narrow vision of capitalism, one that reduces the role of business to profit-making, taxation, and employment. That model may yield growth—but not wellbeing.