Arnold Kling  

Europe's Constitution

PRINT
Many Interest Rates... Comment of the Week, 2003-07-0...

Europe's proposed constitution is receiving scant attention in mainstream media, but many Web sites that I visit have discussed it. Most of the reviews are mixed, but Marian L. Tupy's opinion is unambiguous.


They could have liberalized the rigid European labor market, eased the weight of a plethora of high taxes and reduced the 97,000 pages of regulations.

Instead, they chose to withdraw behind a wall of high tariffs, buttressed by a panoply of subsidies and fortified by prohibitive labor and environmental standards. Worst of all, the prosperity of the European peoples will increasingly be subjected to the whims of a multitude of central planners in Brussels.


For Discussion. Tupy argues that America's prosperity owes much to the principles of limited government given by our Constitution. Europeans have tended to view our main advantage as being the size of our market. Is either of those views correct?


Comments and Sharing


CATEGORIES: Austrian Economics



COMMENTS (10 to date)
rvman writes:

The reason we have a "large market" is because the founders, in their wisdom, restrained the states from acting like a bunch of independent states in their policies. One of a piece with the overall light touch of our founding documents on the day-to-day life of its citizens.

Eric Krieg writes:

Come on! The main difference is the size of our market?

Get real. If that were true, how did Germany grow so fast in the 50s, 60s, 70s, and 80s? How did Japan grow so fast? Korea?

The Europeans are in trouble because they are socialists, nothing more. They could have a market from the Atlantic to the Pacific and their economy wouldn't get any better.

David Thomson writes:

“The Europeans are in trouble because they are socialists, nothing more. They could have a market from the Atlantic to the Pacific and their economy wouldn't get any better.”

Yup, and I couldn’t say it any better myself. The Old Europeans must be cured of the economic disease of Socialism if they truly wish to compete against the United States. These people are far too lazy and unwilling to do any serious work.

What is this stuff concerning the “size of our market?” Markets grow or decline based on common sense and mutual benefits. Buyers and sellers normally could care less about the origins of the product or service.

dsquared writes:

>>The Europeans are in trouble because they are socialists, nothing more.

Get real. If that were true, how did Germany grow so fast in the 50s, 60s, 70s, and 80s? How did Japan grow so fast? Korea?

David Thomson writes:

Why focus on the past? Both Germany and Japan are suffering because of their socialist policies of the present. How does the old saying go?: The stuff has finally hit the fan!

rvman writes:

Socialism isn't so bad at playing "catch-up" - when an economy is "behind" the leaders of the world, and the path to progress is clear, socialist planning can work. The amount of information required is manageable, with competent planners. (Not a common thing, btw.)

Once the planned economy catches up with the cutting edge of technology, though, the planners start having to guess at future progress. The markets, by using more brains to do the "planning" work far better in those circumstances.

The Japanese caught up with us, and applied our new technologies in some cases better than we did. (Quality control and robotics, especially.) But they didn't really "develop" most of them. Once they were caught up around 1985, they started flopping around, because the course forward wasn't just "apply US technology" anymore. It was cloudy, and messy, and chaotic - stuff the market is better at.

A similar thing happened in Europe after WWII. While rebuilding and trying to catch the US, socialism worked. Once they were more or less caught up, socialism caught up to them, and they've stagnated.

Eric Krieg writes:

The degree of European socialization increased throughout the postwar period. Right after WWII, the German economy was much freer than it is today. Thus, the steller economic growth, especially compared to, say Laborite England, which was practicing full blown socialism.

Socialism is like anything. In moderation, it won't kill you, and perhaps can be beneficial. But lots of it, like in Europe 2003, is deadly.

Jim Glass writes:

I'm not an expert on administration of the EU, but from what I've read about it, its layers upon layers of expert bureaucrats who are appointed and given power to manage for the "public good" without being subject to electoral review by the voting public remind me very much of the "reformed", reorganized New York City Board of Education that was set up 35 years ago -- which proved a total disaster and is now being dismantled.

If so, Europeans should be afraid ... very afraid.

David Thomson writes:

"Once the planned economy catches up with the cutting edge of technology, though, the planners start having to guess at future progress. The markets, by using more brains to do the "planning" work far better in those circumstances. “

Japan is a very conservative, if not even reactionary nation, which discourages intellectual freedom and a willingness to take risks. The Japanese may be hard workers, but eventually their collectivist mindset gets them into trouble. A culture that prizes bold and independent thinking will almost certainly dominate.

“Planning” ultimately fails because its impossible to know enough to manage virtually every aspect of the overall economy. I don’t care if you possess an IQ of 1000---you still will not be able to even begin comprehending the knowledge to do more than a few jobs effectively. The statist attitude is one of outrageous intellectual arrogance, and therefore logically is inherently doomed to fail.

Mark Bahner writes:

"The reason we have a "large market" is because the founders, in their wisdom, restrained the states from acting like a bunch of independent states in their policies."

I think the reason is almost exactly the opposite. The Founding Fathers ALLOWED states to act like independent states, except for a few very specific areas (e.g., the states were NOT allowed to restrict trade amongst themselves).

The Founding Fathers didn't have any Department of Energy, Department of Education, Department of Agricultural, Department of the Interior, etc. etc. That type of centralization was specifically prohibited by the Constitution.

It's the centralization of Europe's constitution that will hold back their economic growth. Just as our federal government's NOT following our Constitution is slowing economic growth.

Comments for this entry have been closed
Return to top