April 28, 2008

Europe’s Philosophy of Failure

FP is running an article called Europe’s Philosophy of Failure. Citing the summary to give you an idea:

In France and Germany, students are being forced to undergo a dangerous indoctrination. Taught that economic principles such as capitalism, free markets, and entrepreneurship are savage, unhealthy, and immoral, these children are raised on a diet of prejudice and bias. Rooting it out may determine whether Europe’s economies prosper or continue to be left behind.

I don’t want to make a flame on economical systems, models, and so on. But I like to comment on propaganda.

Since I moved to Europe, I have spend lot of time observing the society and comparing (Denken heißt vergleichen) it to what I saw in Chile and what I see from other cultures like the United States. I can’t include Asia in the mix because I know really little.

I think in Europe there is a left wing bias in almost everything. You start to see it in small details that create contradictions in your head, like advocating free speech on one hand as long as it is not right wing ideas (which are called for censorship or “anti” manifestations ). Countries like Belgium, which from one side talks about human rights, but then gives asylum, passports and money to murders from Chile or Spain terrorist groups, just because they are left wing, which upgrades them from murders to “politically prosecuted”. Those are extreme examples.

In the normal day to day life, this left-wing bias will of course end up in education and the way the economy works. However, I think this bias is not bad at all. It is just different. Let’s look at the article’s points:

they are exposed to a dogma that runs counter to core beliefs shared by many other Western countries

Which other Western countries apart of USA (and may be UK)?

Chancellor Angela Merkel, once heralded as Germany’s own Margaret Thatcher, has all but abandoned her plans to continue free-market reforms. She has instead imposed a new “rich people tax,”

More taxes for rich people, and fewer for wealthy corporations is something even the Gates support.

has tightened labor-market rules, and has promised renewed efforts to “regulate” globalization.

I don’t think Europe’s attitude on globalization is bad at all. I think it focuses in very basic aspects:

  • If production is going to be moved to third world, lower salaries there is something you expect, but not everyone expect children to build the products.

  • If one continent cares about the environment and the other does not. Is it globalization anymore? is it fair competition to do it under different moral views?

So the problem on how “capitalism” is being advocated (even if it is there already in almost every country) is surreal. There is no such things as pure free market. Europe may want to protect certain market from unfair competition. How is this different (from the economical point of view) from using military power for oil?

This post is worth to read, and its conclusion:

Comparing the economic performance of the European Union and the USA does not lead one to conclude that America has the more dynamic economy, or that it has performed better in the past or will do so in future. The most important feature of the comparison is neither the growth nor the unemployment record of the US and the EU. It is, rather, that US growth, unlike that in the EU, is funded by a dangerously high mountain of foreign debt. US external indebtedness, in turn, is driven by the US house-price bubble, enabling US consumers to spend more than they earn. Ironically, it is the EU which, together with China and Japan, continues to lend the money to the US which keeps their households spending and their economy growing.

The truth is that neither side ‘wins’ in this beauty contest. Europe merely does less badly than the USA in some crucial respects. Yes, while it is true that the core Eurozone countries could perform far better, Germany, France and Italy have quite different problems – in comparison both to the US and to each other – which require quite different solutions. Anybody who claims that the US provides a model which the EU should copy needs to consider the basic economic facts of the case.

And some of the comments just make the whole point:

In my experience as having worked on both sides of the Atlantic for 7+ years, my appreciations are that in the US, an individual needs to put away a bigger chunk of his/her paycheck for items covered by European taxes.

Thus, in the end, US worker gets taxed higher than its European counterpart.

Or this one:

This article was prophetic in talking about the housing bubble and the inflated by debt growth numbers in the USA. The new IMF stats show Europe starting to trash the USA even when it comes to GDP per capita. My country (Netherlands) was just a year ago 2k behind the USA now we are 6K ahead in just as year! Both France and the UK are now projected to overtake the USA (the UK in 09 and France in 2010+) and the former is especially impressive seeing how much hours they spend NOT working compared to the states.

I am leaving the health system topic out of the post, but it is also an interesting point.

So please guys. Let accept there are two different models. But I don’t think doing propaganda on the false basis that one performs better than the other.