Stagnant Europe

Another off-line weekend. It looks like I lost my weekend internet connection.

I am interested in why one economy flourishes while another goes stale. There is a stark picture today. The US for all our faults keeps growing, sometimes faster, sometimes slower, but growing. But Europe has had little growth in a decade. Policies intended to increase employment cause bureaucratic rigidity and result in worse unemployment. For example, France instituted a 35-hour work week in 1999 or 2000, claiming that the shorter work week will cause employers to hire more people. It was one more restriction on the contract between employers and their workers and resulted in more unemployment.

Paul Johnson, the British historian, in the Wall Street Journal on June 17 looks at what is wrong with Europe. This email link might work. Normally a subscription is required.

That Europe as an entity is sick and the European Union as an institution is in disorder cannot be denied. But no remedies currently being discussed can possibly remedy matters. What ought to depress partisans of European unity in the aftermath of the rejection of its proposed constitution by France and the Netherlands is not so much the foundering of this ridiculous document as the response of the leadership to the crisis, especially in France and Germany.

Jacques Chirac reacted by appointing as prime minister Dominque de Villepin, a frivolous playboy who has never been elected to anything and is best known for his view that Napoleon should have won the Battle of Waterloo and continued to rule Europe.

Gerhard Schröder of Germany simply stepped up his anti-American rhetoric. What is notoriously evident among the EU elite is not just a lack of intellectual power but an obstinacy and blindness bordering on imbecility. As the great pan-European poet Schiller put it: "There is a kind of stupidity with which even the Gods struggle in vain."

I can't improve on Johnson. His remedy has three parts.

First, it has tried to do too much, too quickly and in too much detail. Jean Monnet, architect of the Coal-Steel Pool, the original blueprint for the EU, always said: "Avoid bureaucracy. Guide, do not dictate. Minimal rules." ....

But...

In fact, for an entire generation, the EU has gone in the opposite direction and created a totalitarian monster of its own, spewing out regulations literally by the million and invading every corner of economic and social life. The results have been dire: An immense bureaucracy in Brussels, each department of which is cloned in all the member capitals. A huge budget, masking unprecedented corruption, so that it has never yet been passed by auditors, and which is now a source of venom among taxpayers from the countries which pay more than they receive.

They are trying to impose "The one, best way" on every country.

This, as it turns out, is actually the perfect formula for stagnation. What makes the capitalist system work, what keeps economies dynamic, is precisely nonconformity, the new, the unusual, the eccentric, the egregious, the innovative, springing from the inexhaustible inventiveness of human nature. Capitalism thrives on the absence of rules or the ability to circumvent them.

Hence it is not surprising that Europe, which grew rapidly in the 1960s and 1970s, before the EU got going, has slowly lost pace since Brussels took over its direction and imposed convergence. It is now stagnant. Growth rates of over 2% are rare, except in Britain, which was Thatcherized in the 1980s and has since followed the American model of free markets.

Second...

There is another still more fundamental factor in the EU malaise. Europe has turned its back not only on the U.S. and the future of capitalism, but also on its own historic past. Europe was essentially a creation of the marriage between Greco-Roman culture and Christianity. Brussels has, in effect, repudiated both. There was no mention of Europe's Christian origins in the ill-fated Constitution, and Europe's Strasbourg Parliament has insisted that a practicing Catholic cannot hold office as the EU Justice Commissioner.

And...

Equally, what strikes the observer about the actual workings of Brussels is the stifling, insufferable materialism of their outlook. The last Continental statesman who grasped the historical and cultural context of European unity was Charles de Gaulle. He wanted "the Europe of the Fatherlands (L'Europe des patries)" and at one of his press conferences I recall him referring to "L'Europe de Dante, de Goethe et de Chateaubriand." I interrupted: "Et de Shakespeare, mon General?" He agreed: "Oui! Shakespeare aussi!"

No leading member of the EU elite would use such language today. The EU has no intellectual content. Great writers have no role to play in it, even indirectly, nor have great thinkers or scientists. It is not the Europe of Aquinas, Luther or Calvin -- or the Europe of Galileo, Newton and Einstein. Half a century ago, Robert Schumann, first of the founding fathers, often referred in his speeches to Kant and St. Thomas More, Dante and the poet Paul Valery. To him -- he said explicitly -- building Europe was a "great moral issue." He spoke of "the Soul of Europe." Such thoughts and expressions strike no chord in Brussels today.

In short, the EU is not a living body, with a mind and spirit and animating soul. And unless it finds such nonmaterial but essential dimensions, it will soon be a dead body, the symbolic corpse of a dying continent.